By Shobhana Chandra
Sept. 30 (Bloomberg) -- U.S. consumers grew more pessimistic in September for the first time in three months as the credit crisis intensified, stocks plunged, firings accelerated and housing fell deeper into a recession, economists said before reports today.
The New York-based Conference Board's confidence index fell to 55 from 56.9 in August, according to the median forecast in a Bloomberg News survey. Another report may show a record drop in home prices over the 12 months ended in July.
Failing banks, evaporating wealth and paychecks that aren't keeping up with inflation raise the odds that spending, the biggest part of the economy, will keep faltering. The outlook dimmed even more yesterday when the government failed to approve a financial rescue plan.
``Recent developments in financial markets probably led to darker moods,'' said Michael Moran, chief economist at Daiwa Securities America Inc. in New York. ``Consumers are starting to spend much more cautiously.''
Forecasts for the confidence gauge ranged from 48 to 66 in the Bloomberg survey of 61 economists. The Conference Board's report is due at 10 a.m. New York time. The index reached a 16- year low of 51 in June and averaged 103.4 last year.
Home prices in 20 U.S. metropolitan areas slid 16 percent in the year ended in July, the most since records were first published in 2001, economists forecast a report from S&P/Case- Shiller at 9:00 a.m. will show. Values have been dropping on a year-over-year basis since January 2007.
Foreclosures
The number of properties on the market is swelling as banks try to unload foreclosed houses and limit losses, putting additional pressure on home values.
A third report may show business activity slowed this month. The National Association of Purchasing Management-Chicago's index probably fell to 53 from 57.9 in August, according to the survey median. Fifty is the dividing line between growth and contraction.
The cutoff data for this month's consumer confidence survey was Sept. 23, before Washington Mutual Inc. joined Lehman Brothers Holdings Inc. in bankruptcy, Citigroup Inc. acquired Wachovia Corp. to prevent the collapse of the sixth-biggest U.S. bank by assets, and stocks suffered their biggest drop since 1987.
The House of Representatives voted down a $700 billion plan intended to restore confidence in U.S. banks, sending the Standard & Poor's 500 Index tumbling almost 9 percent.
Job's Influence
Compared with other sentiment measures, the Conference Board's index tends to be more influenced by consumer attitudes about the labor market, economists said. So far this month, 466,000 Americans a week on average filed first-time claims for unemployment benefits, up from 443,000 in August and 363,000 in the first six months of the year.
A report last week showed the Reuters/University of Michigan final sentiment reading for this month declined from a preliminary figure issued in early September as the credit crisis deepened. The reading was still up from August, reflecting the decline in gasoline prices, economists said.
The economy probably lost another 105,000 jobs in September, the ninth consecutive monthly decline, according to the median estimate in a Bloomberg survey ahead of a Labor Department report due Oct. 3. Payrolls dropped by 605,000 workers in the first eight months of the year.
Job cuts may swell as the effects of the financial meltdown ripple through other industries. Fewer jobs and less-available credit indicate consumer spending, which accounts for more than two-thirds of the economy, will weaken further.
Auto Loans
Fewer Americans were able to obtain an auto loan this month, according to CNW Marketing Research in Bandon, Oregon, which analyzes auto-industry data.
Through Sept. 20, fewer of the lowest-risk, or prime, loans were approved compared with a year earlier, while approvals for so-called subprime loans, for buyers with the lowest credit scores, were only about a third as many as in 2007, CNW said.
``Given the relatively weak state of the economy, that's obviously impacting the consumer's ability or willingness to come out and buy a new car,'' General Motors Corp. Chief Executive Officer Rick Wagoner said in a Bloomberg Radio interview on Sept. 25 from Flint, Michigan.
Consumer spending this quarter will be unchanged, the weakest performance since 1991, according to the median estimate in a Bloomberg survey earlier this month.
Bloomberg Survey
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Case Shil Chicago Consumer
Monthly PM Conf
YOY% Index Index
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Date of Release 09/30 09/30 09/30
Observation Period July Sept. Sept.
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Median -16.0% 53.0 55.0
Average -16.0% 52.8 56.2
High Forecast -14.5% 56.0 66.0
Low Forecast -16.5% 49.0 48.0
Number of Participants 23 58 61
Previous -15.9% 57.9 56.9
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4CAST Ltd. -16.0% 54.0 66.0
Action Economics --- 52.0 65.0
Aletti Gestielle SGR --- 54.3 52.0
Analytical Synthesis -16.0% --- ---
Argus Research Corp. --- 55.0 55.0
Banc of America Securitie --- 52.5 57.0
Bank of Tokyo- Mitsubishi --- 51.8 58.7
Bantleon Bank AG --- 52.0 56.0
Barclays Capital --- 54.0 54.0
BBVA --- 55.0 54.0
BMO Capital Markets -16.1% 52.0 57.5
BNP Paribas --- 52.5 65.0
Calyon --- 55.0 54.0
Commerzbank AG --- 53.0 56.0
Credit Suisse --- 52.0 50.0
Daiwa Securities America --- --- 59.0
Danske Bank --- 54.7 57.0
DekaBank --- 52.0 54.0
Desjardins Group -15.8% 51.0 56.0
Deutsche Bank Securities --- 54.0 55.0
Dresdner Kleinwort -16.0% 52.0 52.0
DZ Bank -16.0% 55.0 53.0
First Trust Advisors --- 54.8 60.7
Fortis -16.2% 52.0 57.0
FTN Financial --- 52.0 ---
Goldman, Sachs & Co. --- 53.0 57.0
H&R Block Financial Advis --- 51.0 54.0
Helaba --- 50.0 52.0
High Frequency Economics -16.2% 55.0 58.0
HSBC Markets -16.2% 52.0 53.0
IDEAglobal -16.0% 53.0 59.0
Informa Global Markets --- 52.5 55.0
ING Financial Markets -16.5% 54.0 54.0
Insight Economics --- 54.5 53.5
Intesa-SanPaulo --- 54.0 55.0
J.P. Morgan Chase -16.2% 52.0 61.0
JPMorgan Private Client --- 51.0 ---
Landesbank Berlin --- 52.0 52.0
Landesbank BW -16.0% 52.0 56.0
Lehman Brothers -16.1% 54.2 58.0
Lloyds TSB -14.5% 56.0 56.0
Maria Fiorini Ramirez Inc --- 53.0 54.0
Merk Investments --- 54.0 55.0
Merrill Lynch -16.2% 50.0 54.0
Moody's Economy.com --- 53.5 55.5
National City Corporation --- --- 65.3
Natixis -15.7% --- 54.0
Newedge --- 53.0 52.0
Nomura Securities Intl. --- 49.0 ---
Okasan Securities -15.6% --- ---
RBS Greenwich Capital --- --- 60.0
Ried, Thunberg & Co. --- 53.0 58.0
Schneider Trading Associa -15.3% 52.6 48.0
Scotia Capital --- --- 50.0
Societe Generale --- 54.0 57.0
Stone & McCarthy Research --- 51.4 54.0
TD Securities -16.5% 50.0 ---
Thomson Financial/IFR --- 54.0 55.0
Tullett Prebon --- 53.0 54.5
UBS Securities LLC --- 50.0 59.0
Unicredit MIB -16.0% --- 60.0
University of Maryland --- 54.0 55.0
Wachovia Corp. --- --- 60.0
Wells Fargo & Co. --- 52.0 63.0
WestLB AG -16.5% 54.0 54.5
Westpac Banking Co. -16.0% 50.0 52.0
Wrightson Associates --- 53.0 58.0
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To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net
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