Consumer confidence in September falls the most in three years
Consumer opinion of the economy fell in September, falling by the most in more than three years as fears about jobs and business conditions grew, the Conference Board reported Tuesday.
The board’s consumer confidence index fell to 98.7, down from 105.6 in August, the biggest one-month drop since August 2021. The Dow Jones consensus forecast was for a reading of 104. For the On the contrary, the index had a reading of 132.6 in February 2020, a month before the Covid pandemic broke out.
Each of the five constituents the organization shows fared worse in the month, with the biggest drop occurring among those ages 35 to 54 who earned less than $50,000.
“Consumers’ assessments of current business conditions became negative, while opinions about the current labor market situation softened further. Consumers also became more pessimistic about future labor market conditions and less positive about future labor market conditions.” future business trends and future income,” said Dana Peterson, chief economist at The Conference Board.
The last time the confidence index fell the most came when inflation was just beginning to rise to what was ultimately the highest level in more than 40 years.
Stocks suffered some brief losses following the release, while Treasury yields fell.
In addition to the sharp drop in the confidence index, the measure of the current situation worsened by 10.3 points to 124.3 and the expectations index fell 4.6 points to 81.7. To the extent of expectations, a reading below 80 is consistent with a recession.
Respondents’ concerns focused primarily on employment and inflation.
Those who say jobs are plentiful continued to decline, falling to 30.9% from 32.7% in August, while the measure of “hard to get” jobs rose to 18.3%, from 16.8%. .
As for inflation, the 12-month outlook rose to 5.2%, with concerns about price increases topping the list of economic concerns.
“The share of consumers anticipating a recession over the next 12 months remained low, but there was a slight increase in the percentage of consumers who believed the economy was already in a recession,” Peterson said.
The survey comes less than a week after the Federal Reserve voted to cut benchmark interest rates by half a percentage point, citing a more favorable outlook for inflation and concerns about a possible weakening of the labor market. It was the first rate cut in four years and double the traditional quarter-point reduction.
However, the survey was conducted through September 17, the day before the Federal Reserve approved the rate cut.
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