The Conference Board reported on Tuesday that its consumer confidence index dropped to 81.9 points in September, marking a 6.7-point decline. This reading is significantly lower than the 89-point average forecast by Dow Jones. The decline reflects growing pessimism among consumers regarding the job market and the impact of rising prices on their financial situations.
The survey revealed that participants expressed concerns about inflation and job market prospects. For the first time since this question was included in the survey four years ago, more participants described their personal financial situation as "bad" compared to those who described it as "good". Dana Peterson, chief economist at Conference Board, noted that consumers' assessments of current business conditions turned negative for the first time since September 2021.
According to Peterson, consumer responses about factors influencing the economy were largely pessimistic in September. The survey recorded a significant increase in mentions of prices, particularly the rising cost of goods and services, oil, and gas, reflecting the sharp increase in fuel costs during the month. Other indicators also showed similar deterioration, with the Present Situation index dropping 7.9 points to 109.3 points.
The Expectations index, which measures the outlook for the next six months, declined 5.9 points to 63.6 points. The labor market survey also showed a decline, with the difference between those who describe jobs as "plentiful" and those who describe them as "hard to get" decreasing by 2.5% to 1.7%. This metric is closely watched for signs of labor market health.
The results come amid rising inflation expectations, driven by ongoing uncertainty surrounding the Iran-related conflict, which has led to a sharp increase in US Treasury yields and mortgage rates. On average, survey participants expect an inflation rate of 6.1%, a 0.3% increase from August. The median expectation also rose by 0.3 points to 5.1%.
The Conference Board reading aligns with similar survey results. The University of Michigan's consumer confidence index also reported a 7% decline in September, reaching the second-lowest level on record. In other economic news, the US Bureau of Labor Statistics reported that job openings declined slightly to 7.08 million in August.
The decline in job openings was driven by significant decreases in professional and business services and healthcare. Analysts on Wall Street had forecast 7.2 million job openings. Employment rates edged up slightly during the month, while quit rates remained unchanged, and layoffs decreased modestly.
Key points
- Consumer confidence index dropped to 81.9 points in September.
- Inflation expectations rose to 6.1% in September.
- Job openings declined to 7.08 million in August.
