Business

Consumer confidence falls slightly in September

Consumer activity accounts for most of the US economy, but strong concern about the job market persists.

Matt Rourke/Associated Press

Consumer activity accounts for most of the US economy, but strong concern about the job market persists.

WASHINGTON — Confidence in the economy fell slightly in September from August, as many Americans became less optimistic about hiring and pay increases over the next six months.

The Conference Board, a private research group, said its consumer confidence index fell to 79.7 in September from August’s reading of 81.8.

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Consumers’ confidence is closely watched because their spending accounts for 70 percent of economic activity. The September reading was slightly below June’s reading of 82.1, the highest in 5½ years.

While confidence has bounced back from the depths of the Great Recession, it has yet to regain the reading of 90 that typically coincides with a healthy economy.

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This month, confidence fell on a dimmer outlook for the next few months. Lynn Franco, who oversees the survey, said that reflects concern about the job market and wages. Consumers were actually more optimistic about current conditions. ‘‘While overall economic conditions appear to have moderately improved, consumers are uncertain that the momentum can be sustained in the months ahead,’’ Franco said.

Amna Asaf, an economist at Capital Economics, said higher interest rates and lower stock prices contributed to the drop in confidence. But she noted the survey was concluded before last week’s decision by the Federal Reserve to make no changes in its bond-buying stimulus program. That decision sent stock prices up and interest rates down.

‘‘We suspect that if the rebound in equity prices is sustained, along with the drop back in gasoline prices, confidence will rebound,’’ she said.

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On Tuesday, the average US price for a gallon of gas was $3.46 — eight cents cheaper than a month ago.

Recent data suggest economic growth may be slowing. Consumers spent more cautiously in August. And higher interest rates are threatening to slow home sales.

The economy added 169,000 jobs in August, hardly enough to signal robust job growth. The US unemployment rate fell to 7.3 percent from 7.4 percent. But the decline was mostly because more people stopped looking for work and were no longer counted as unemployed.

A weaker outlook for the rest of the year was a key reason the Federal Reserve decided not to slow its $85-billion-a-month in bond purchases. The purchases have kept longer-term interest rates low, making mortgages and other consumer loans more affordable.

The economy has been held back this year by tax hikes, federal spending cuts, and weaker global growth. It expanded at an annual rate of 2.5 percent in the April-June quarter. But many economists say growth has slowed to an annual rate of 2 percent or less.

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