US consumer confidence fell sharply in September, suffering its largest one-month drop since October 1990 - during the Gulf crisis - according to a survey released today.
The report illustrates the extent of the economic shock from the September 11th attacks on New York City and the Pentagon.
The eroding US labour market and weakening business conditions weighed heavily on consumers, today’s report said, threatening to undermine retail spending, one of the few remaining tethers of strength in an economy most economists believe is in recession.
The Conference Board, a New York-based private business research group, said its monthly index of consumer confidence fell to 97.6 in September, from a downwardly-revised 114.0 in August. Wall Street economists had forecast a fall to 105.1.
"While consumers have managed to keep the US out of a recession for several years now, that soon may no longer be the case," said Ms Lynn Franco, director of the Conference Board's Consumer Research Center, in a statement.
The Present Situation Index, which measures consumer views of the economy right now, extended its slide, falling to 125.2 from a revised 144.5 in August.
The Expectations Index, which gauges consumers' outlook for the next six months, slid to 79.2 in September from a revised 93.7 in August.
In a harbinger of rising unemployment in the months ahead, 18.5 per cent of respondents said jobs were "hard to get," compared to 16 per cent in August. The category is closely linked with trends in the unemployment rate.
The report is likely to cement expectations the US Federal Reserve, which has already cut its benchmark interest rate eight times this year, will cut rates again at its October meeting to try to ward off a recession.