NEW YORK — Anxiety about the job market is causing consumer confidence levels to dip, while housing sales also are slowing. But economists aren't worried — they say the outlook for improvement remains rosy, and the pullbacks are a normal kink in the economy's path to recovery.
The Conference Board reported Tuesday that its consumer confidence index slipped to 91.3 in December, following a surge in November to a revised figure of 92.5, its highest level in more than a year. A retreat had been expected, although the latest number was below expectations; analysts had forecast the index would come in at 92.2.
Also Tuesday, the National Association of Realtors reported that sales of previously owned homes declined by 4.6 percent in November to a seasonally adjusted annual rate of 6.06 million homes.
Both reports are closely watched because of the insight they provide into the mood of consumers. Consumer spending accounts for two-thirds of the economy, and a confident consumer is more likely to spend. Housing sales have held up overall despite the downturn because of low interest rates that have made mortgages more affordable.
Analysts said the reports did not mean the economic recovery was losing momentum. They noted that a year ago, the consumer confidence index stood at 80.7, and that the newest data showed consumers were still feeling upbeat about the future.
They also pointed out that housing sales had been expected to decrease and that even with the decline, sales of previously owned homes still registered their fifth-best month on record and were poised to set a new record for all of 2003.
"This is all part of a softening trend that had to occur because after we got such robust growth in the third quarter — growth that most people would agree was not sustainable," said Anthony Chan, chief economist at Banc One Investment Advisors in Columbus, Ohio.
"I don't see anything in this that tells me that the recovery is in jeopardy, but I do think we will see a simmering down in the fourth and first quarter."
Analysts said the December consumer confidence report showed that while consumers were nervous about their current circumstances, they were more optimistic about the future. The board's present situation index declined to 73.9 from 81.0, but its expectations index increased to 102.9 from 100.1.
The employment outlook also was higher, with 21.7 percent of those surveyed by the board anticipating more jobs to become available in the next six months. Last month, that figure was 18.5 percent.
"I think the report shows some degree of stabilization," said Parul Jain, deputy chief economist at Nomura Securities International.
"Expectations are up overall, it's only the present situation that is still worrisome. On balance, things are looking pretty strong."
The Conference Board report is based on a survey sent to 5,000 households. The consumer confidence index \compares results to its base year, 1985, when it stood at 100.
The cutoff for the December report was Dec. 16, a day after fugitive fallen Iraqi leader Saddam Hussein was captured and so that had little effect on the indexes.