US consumer confidence declined significantly in September, reaching its lowest point in four months. This downturn has been attributed to growing pessimism about the future state of the economy and labor market. The Conference Board's data revealed that its index slid to 103 in September from a revised 108.7 in August, falling short of Bloomberg economists' median estimate. While the group's current conditions gauge showed a minor increase, the expectations measure, highlighting a six-month consumer outlook, dropped to 73.7 — its lowest since May, suggesting potential economic downturns historically.
Consumers are increasingly voicing concerns about their financial and employment futures. Despite the overarching optimism among economists about the US steering clear of a recession, many American workers remain anxious. Dana Peterson, the Conference Board's chief economist, pinpointed this anxiety to escalating prices across the board, notably in essentials like groceries and gasoline. Additional concerns encompass the prevailing political landscape and the uptick in interest rates.
Amidst the surge in interest rates, the broader economy and labor market have displayed remarkable resilience, underpinning household incomes and balance. However, the employment pace has decelerated, and fuel prices are on the rise. Compounding the challenges, home prices are climbing, reducing consumers' savings and making homeownership increasingly elusive due to soaring borrowing costs.
Despite the broader sentiment, there's a slightly positive perspective concerning the present labor market, with approximately 41% of consumers believing that job opportunities are abundant. However, when projecting into the next half-year, a larger segment anticipates a decrease in job availability. The differentiation between perceived job abundance and scarcity, a significant labor-market strength indicator, has risen to 27.3. Interestingly, consumer outlook for large purchases, such as cars, homes, and major appliances, has also waned.
