With concerns over jobs rising a little, the confidence of the American consumer appears to be waning.
According to business research group the Conference Board, its consumer confidence index fell to 98.7 in September, down from 105.6 in August.
That represents the largest month-to-month drop since August 2021, according to a new report from The Associated Press.
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.
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, according to the AP report.
“Consumers’ assessments of current business conditions turned negative while views of the current labor market situation softened further,” Dana Peterson, the Conference Board’s chief economist, told the AP. Consumers were also more pessimistic about future labor market conditions, Peterson said.
The labor market has been loosening lately, with jobs numbers steadily declining in recent months.
Employers added 142,000 jobs in August, up from an even weaker 89,000 in July. The unemployment rate ticked down to 4.2% from 4.3%, which had been the highest level in nearly three years. Hiring in June and July was revised sharply down by a combined 86,000. July’s job gain was the smallest since the pandemic.
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.
