NEW YORK and WASHINGTON (9/26/14)--A measure of consumer confidence dropped to a four-month low amid declining manufacturing activity and an increase in first-time jobless claims.
The Bloomberg Consumer Comfort Index dipped to 35.5 for the period ending Sept. 21--the lowest the measure has been since falling to 37.2 in the first week of June (Bloomberg.com Sept. 25). Driving the downturn was movement in the personal finances component, which fell by three points to 51.3--the biggest decline since mid-May. The input measuring Americans' feelings on the present state of the economy fell by 1.1 to 22.9--the lowest reading since May 25.
Meanwhile, new unemployment insurance claims rose by 12,000 to 293,000 for the week ending Sept. 20, according to the Department of Labor, and new orders for manufactured goods dropped by 18.2% in August, said the Department of Commerce. Both agencies issued those reports on Thursday.
Bloomberg pointed out that the drop in its comfort index is caused by individuals who are particularly vulnerable to fluctuations in the labor market. The gauge measuring the confidence of Americans making less than $50,000 per year fell to a four-month low, while the same component measuring the confidence of Americans who make more than $50,000 rose by 2.4 points to 49.7. The gap between the two income brackets, Bloomberg said, is at its widest since the beginning of June.
Moody's analysts said that the decline in durable manufactured goods announced by the Labor Department was not a "cause for concern," and pointed out a spike in civilian aircraft production in July (Economy.com Sept. 25). The department's measure of transportation goods produced also fell by 42% in August, while its measurements of durable goods--excluding transportation and core capital goods orders--rose by 0.7%. and 0.6%.
Moody's also warned against reading too much into the rise in unemployment claims, with initial readings being historically inaccurate around Labor Day weekend (Economy.com Sept. 25).
The less-volatile four-week moving average, the ratings and research firm pointed out, was below 300,000 for the second week running--a threshold that has only been reached 14% of the time since 1967. For the week ending Sept. 20, the measurement fell to 298,500 from 299,750.
Moody's also insisted that business confidence is strong and that workers are increasingly confident in the availability of other work when laid off. Its analysts said they remain "comfortable" with predicting that nonfarm payrolls will increase in September by 210,000, but that the prediction has yet to be finalized.