Layoffs, Personal Finances Undermine Consumer Confidence

Consumers haven't jumped on the recovery bandwagon, according to a study by BIGresearch, despite encouragement from government, business and Wall Street.

The market research firm has reported that its index of consumer confidence fell in September, with only 30 percent of consumers saying they are confident/very confident that the economy will manage a strong performance in the coming weeks, down from August level of 31 percent. Still, that's better than during September of last than last year, when only 28 percent of consumers were confident or very confidence in the economy's prospects.

Concerns about unemployment and personal finances are weighing on consumers. When polled earlier this month, 36 percent of consumers said they expected more layoffs over the next six months as opposed to 35 percent in August. And it's not like the rest of the consumers polled expected improvement, as 45 percent said they anticipate layoff rates to remain the same. Only 19 percent are counting on a decline in job losses, down from 21 percent in August.

Meanwhile, only 22 percent of consumers say that they are saving enough for future needs compared to 49 percent who say they aren't. So it's not surprising that improving personal finances remains a concern, which certainly tells against additional spending at retail. Paying down debt will remain a priority with 35 percent of consumers over the next three months, which represents an increase from 34 percent in September 2008. About 32 percent of consumers are concentrating on decreasing their spending overall.