New York, NY, Sept. 26—Growing anxiety about jobs and uncertainty arising from this month's terrorist attacks pushed consumer confidence in September to its lowest level in nearly six years. The Conference Board reported that its Consumer Confidence Index plummeted to 97.6 from a revised 114 in August. The slide is the largest monthly point drop since it fell 23 points in October 1990, a few months after Iraq invaded Kuwait to spark the Persian Gulf War. The latest figure is based on data collected both before and after Septeptember 11.

The Conference Board said that the difference in the data collected before and after that date was insignificant and that the downward trend was already in place.

“(The index) would have fallen this far even without the attacks,'' said Lynn Franco, director of the Conference Board's Consumer Research Center.

Other analysts disagreed.

“When all is said and done, I'm sure the attack is going to be shown undermining confidence,” said Mark Zandi, the chief economist at Economy.com. “A bunker mentality is descending on consumers and investors—everyone is battening down the hatches.”

The index, based on a monthly survey of some 5,000 U.S. households, is closely watched because consumer confidence drives consumer spending, which accounts for about two thirds of the nation's economic activity. The index compares results to its base year, 1985, when it stood at 100.

Until the attacks, consumer spending remained one of the pillars of the struggling economy. But the erosion in confidence in September appeared to assure it would slip into a recession.

“While consumers have managed to keep the United States out of a recession for several years now, that soon may no longer be the case,” Franco said.

Zandi agreed. “I think this is proof positive we're in a recession.”

The last time consumer confidence fell below 97.6 came in January 1996, when the index stood at 88.4.

The announcement of tens of thousands of layoffs in the airline industry following the attacks and uncertainty about the government's response them have deepened consumers' worries about their jobs, according to economists.

“We do have to fear fear itself, it matters, it affects consumer spending,” said Bill Cheney, chief economist at John Hancock Financial Services. “If people aren't confident, people don't spend and the economy is damaged by that.” 

The Conference Board reported that the percentage of consumers claiming jobs were hard to get climbed to 18.5% in September from 16% in August. As a result, they're less inclined to open their wallets, Franco said.

The board also said that expectations for the next six months were even more pessimistic. The percentage of consumers who think business conditions will worsen increased to 15% from 10.7%. Those expecting fewer jobs rose to 21.9% in September from 17.7% in August.

Consumers also were less optimistic that their income would rise in the coming months, with 21.1% expecting an increase, down from 23.2% in August.

The erosion of consistent sentiment is consistent with previous declines that have occurred when a national tragedy destabilizes a troubled economy, the Conference Board said in a letter to its members last week.

U.S. economic conditions on Sept. 11 were similar to those at the time of the Oklahoma City bombing in April 1995 and the Iraqi invasion of Kuwait in August 1990. Both events reinforced the downturn in consumer confidence.

“The economic trends already under way before such unprecedented and unexpected events influence greatly the perceptions of individuals and national responses to those events,” the board’s report stated.

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