The Michigan sentiment survey’s current conditions index, which takes stock of Americans’ view of their personal finances, fell to a five-month low in September. The measure of expectations six months from now plunged to the lowest level since January.
Fed officials begin a two-day meeting on Sept. 17 and will consider when to begin scaling back $85 billion in monthly bond purchases intended to spur employment and the economy.
Companies created 169,000 jobs last month, fewer than economists projected, and gains in the previous two months were revised down. Unemployment fell to 7.3%, the lowest since December 2008, as workers left the labor force. August and July were the weakest back-to-back months for payroll gains in a year.
The slower progress in employment has also been accompanied by limited income growth. Disposable income, or money left over after taxes, increased 0.8% in July after adjusting for inflation, according to the Commerce Department. In 2012, it rose 2%.
Fed efforts to hold down borrowing costs have encouraged some Americans to make big-ticket purchases. Today’s retail sales report showed automobile dealer receipts climbed 0.9% after a 0.5% drop the prior month.
Cars and light trucks sold in August at the fastest annualized rate since November 2007, according to data from Ward’s Automotive Group. Sales at General Motors Co., Ford Motor Co., Toyota Motor Corp. and Honda Motor Co. all exceeded analysts’ estimates.
Vehicle sales strengthened at the expense of declining demand for other goods. Purchases excluding autos, gasoline and building materials, the figure used to calculate gross domestic product, rose 0.2% after a 0.5% increase in the previous month, the Commerce Department data showed.
At clothing chains, spending fell 0.8%, while general merchandise stores posted a 0.2% decline. Furniture sales rose, reflecting this year’s rebound in the housing market.
Some higher-end retailers, including fashion accessory designer Michael Kors Holdings Ltd. and home furnishings outlet Restoration Hardware Holdings Inc., are reporting strong traffic at their stores.
Restoration Hardware, based in Corte Madera, California, is part of a $143 billion furnishings business that caters to more affluent spenders. The company is planning a series of design centers to showcase its furnishings, fixtures and textiles, said Carlos Alberini, co-chief executive officer.
“In many cases we are bringing new customers in, but also we are seeing that our existing customers are buying more of what we are offering,” Alberini said at a Sept. 11 conference. “In all these cases, there is pent-up demand in our customer base for these type of products that we are about to offer.”