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America's New War: Consumer Confidence May Drop Further

Aired September 25, 2001 - 05:02   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: Today's consumer confidence report is expected to come out, and it is expected to be lower.

CNN's Brooks Jackson reports that it still may too soon to sum up our economic woes.

(BEGIN VIDEOTAPE)

BROOKS JACKSON, CNN CORRESPONDENT (voice-over): Is America's economic mood recovering? Monday's news was mostly positive. The stock market surged, regaining nearly 30 percent of what it lost last week. Hundreds of billions of dollars in wealth rematerialized, at least on paper.

Crude oil prices plunged to their lowest in nearly two years, bad for oil producers but good for consumers and industry. Gasoline prices have edged out a couple of cents at the pump too. People aren't driving as much. Even New York's theater district was showing signs of recovery, according to the mayor.

MAYOR RUDOLPH GIULIANI, NEW YORK: Over the weekend, the Broadway plays started doing better. Some of them that we thought were in trouble did a lot better.

JACKSON: Economists remain nervous. Most now expect a full- blown recession, but in reality, the numbers they usually rely on are not yet able to measure life after September 11.

GAIL FOSLER, ECONOMIST: Frankly, we don't have any hard data. I don't think that we'll really have any information of any consequence until the end of October.

JACKSON: Layoff announcements are real enough. Airlines are suffering -- hotels and resorts too.

Treasury Secretary Paul O'Neill, in a phone hookup to hundreds of chambers of commerce, said the attacks have set the U.S. economy back perhaps six months.

PAUL O'NEILL, TREASURY SECRETARY: I would say there's a pretty broad consensus among economists that what's happened to us is going to delay the recovery, as I said, by a quarter or maybe two.

JACKSON: But how much the rest of the economy weakens depends largely on the unknowable. What's in the minds of consumers? Will there be buyers for big-ticket items?

UNIDENTIFIED MALE: We have to be more conscious about our spending habits right about now, because you never know where the next dollar is going to come from.

UNIDENTIFIED MALE: If there's as many layoffs as they're talking about, everybody is getting spooked.

MARTIN REGALIA, U.S. CHAMBER OF COMMERCE: The money is still out there. The income generating potential in our economy is still there. The production capacity -- the ability to move goods -- all unchanged by this event. But what's really changed is the consumer psyche, and that's a very, very difficult thing for economists to gauge.

JACKSON: Even the monthly survey of consumer confidence, out Tuesday, won't be of much use. Most of the consumers were questioned before September 11.

(on camera): In the days to come, there will be plenty of anecdotes in bits and pieces, good days and bad days, but it may be Thanksgiving before economists can really tell how badly the economy has been hit.

Brooks Jackson, CNN, Washington.

(END VIDEOTAPE)

HARRIS: Well, the results for September's consumer confidence survey are due out this morning, and even though Brooks Jackson says it won't tell us much, the numbers should still prove interesting.

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