Americans in both the living room and the boardroom are growing more fearful about the economy, creating a Catch-22 for the job market: shoppers won’t spend until they feel more secure, and business won’t hire until people start spending. The eroding views were revealed on Tuesday by two separate surveys, one that found everyday Americans are increasingly pessimistic about jobs and another that found CEOs have grimmer predictions about upcoming sales.
“The economy is stuck in an unvirtuous cycle,” said Mark Vitner, an economist at Wells Fargo. “Consumers are waiting for more jobs to be created, and businesses are waiting for consumers.” The monthly consumer confidence index from the Conference Board, a private research group, fell to 48.5 in September, its lowest point since February and down from 53.2 in August. Economists surveyed by Thomson Reuters were expecting 52.5 for September. It takes a reading of 90 to indicate a healthy economy — a level not approached since the recession began in December 2007.
Meanwhile, a poll by Business Roundtable, an association of CEOs of big companies, found two-thirds of chief executives expected sales to grow over the next six months. That’s down from 79 per cent in June.
Causing uncertainty, Vitner says, are the Nov 2 elections, when voters worried about increasing deficits and the economy’s slow recovery will decide whether to keep Democrats in power in Congress.