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The Numbers: Strong Holiday Sales Forecast Despite Consumer Confidence Dip

CHICAGO — BUREAU OF LABOR STATISTICS data released toward the end of September shows that the national jobless rate in August was about the same as July’s, 7.3%. That was less than 1% below the previous year’s data.

The report listed 18 states and the District of Columbia with higher unemployment rates. Seventeen states saw their jobless rates decline, and 15 states remained static.

No new numbers were released after Oct. 4 by the U.S. Department of Labor.

THE INSTITUTE FOR SUPPLY MANAGEMENT reported a decline in the Non-Manufacturing Business Activity Index for September, which, according to ISM, indicates that growth had slowed from August.

According to the report, the fall to 55.1% (down 7.1 percentage points) reflects growth but at a much slower rate than previously indicated. Respondents to the ISM survey continue to be positive, but are uncertain as to the future of the country’s economy, the Institute says.

MORTGAGE APPLICATIONS were down for the last week of September, according to the Mortgage Bankers Association’s weekly survey. Refinancing activity increased to 63% of the total number of applications, the highest level since August. The average interest rate for a 30-year, fixed-rate mortgage was down to 4.49%, the lowest rate since June.

New foreclosures were down 2% in August as compared to July.

Pending home sales slowed in August, according to the National Association of Realtors, with tighter inventory, higher interest rates, rising prices and continued restrictions on credit seen as major factors.

The Association’s Pending Homes Sales Index, which focuses on contracts not closings, was down to 107.7 in August, compared to 109.4 in July, although the number remains 5.8% higher compared to August 2012.

THE INTERNATIONAL COUNCIL OF SHOPPING CENTERS forecasts a 3.4% increase in holiday sales, a stronger showing for the November/December shopping period than last year. Retailers, on the other hand, are expecting more moderate spending this season. The ICSC also forecasts higher sales for shopping centers and chain stores.

CONSUMER CONFIDENCE FELL in September, according to the Surveys of Consumers by Thomson Reuters and the University of Michigan. American consumers see slow economic growth with fewer job opportunities and lower personal financial projections.

Consumer complaints about economic policies were on the rise, and negative references to government policies were two times as high as they were only three months ago. Net income was down for most households, and half of those surveyed anticipated no income increase in the year ahead.

Richard Curtin, Surveys of Consumers chief economist, commented on the results Sept. 27, just days before the U.S. government shutdown.

“Although consumers have come to expect the Congressional theater that is now playing, they don’t expect the President and Congress to be careless enough to allow a government shutdown. … If consumers come to believe a shutdown is probable, it may generate a precautionary response that would significantly slow spending and overall economic growth. … Consumer confidence is fragile enough without this added source of economic uncertainty.”


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