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WASHINGTON – American consumers are feeling less confident this month as concerns about jobs rose significantly.
The Conference Board, a business research group, said Tuesday that its consumer confidence index fell to 98.7 in September, from 105.6 in August. It was the biggest month-to-month decline since August of 2021.
The survey was conducted before the Federal Reserve announced a bigger-than-expected half-point interest rate cut last week. The index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.
“September’s decline was the largest since August 2021 and all five components of the Index deteriorated. Consumers’ assessments of current business conditions turned negative while views of the current labor market situation softened further. Consumers were also more pessimistic about future labor market conditions and less positive about future business conditions and future income,” said Dana M. Peterson, chief economist at The Conference Board.
The measure of Americans’ short-term expectations for income, business and the job market fell to 81.7 from 86.3 in July. A reading under 80 can signal a potential recession in the near future.
Consumers’ view of current conditions fell to 124.3 in September from 134.3 last month.
Consumer spending accounts for nearly 70% of U.S. economic activity and is closely watched by economists for signs how the American consumer is feeling.
“The drop in confidence was steepest for consumers aged 35 to 54. As a result, on a six-month moving average basis, the 35–54 age group has become the least confident while consumers under 35 remain the most confident,” Peterson said.
Peterson added: “The deterioration across the Index’s main components likely reflected consumers concerns about the labor market and reactions to fewer hours, slower payroll increases, fewer job openings – even if the labor market remains quite healthy, with low unemployment, few layoffs and elevated wages. The proportion of consumers anticipating a recession over the next 12 months remained low but there was a slight uptick in the percentage of consumers believing the economy was already in recession.”
The Associated Press contributed to this report.
Source: The Conference Board
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