Casey Harper (Center Square)
Americans’ confidence in the economy fell sharply in September, the biggest one-month drop since the start of the COVID-19 pandemic, according to newly released data.
The Conference Board’s consumer confidence index, a gauge of how confident Americans are in the economy, plunged in September. The reading fell from 105.6 in August to 98.7 in September, the biggest drop since August 2021.
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“Consumer confidence fell in September to near the bottom of a narrow range that has persisted for the past two years,” Dana Peterson, chief economist at The Conference Board, said in a statement. “September’s decline was the largest since August 2021, with all five components of the index deteriorating. Consumers’ assessments of current business conditions turned negative, and their views about current labor market conditions softened further.”
The federal government announced earlier this year that it had significantly overstated previous data on the number of jobs the U.S. economy created last year, meaning the labor market last year was much weaker than previously reported by the federal government.
In fact, the U.S. economy created 818,000 fewer jobs than federal economists had previously expected, a decline of about 30%—the largest jobs data revision in 15 years.
“Consumers were also more pessimistic about future labor market conditions and less positive about future business conditions and future incomes,” Peterson added.
Inflation has slowed after a breakneck pace in the early days of the Biden administration, prompting the Federal Reserve to cut interest rates for the first time since 2020. But prices remain high, up more than 20% since President Joe Biden took office.
“This morning’s Conference Board consumer confidence report was surprisingly weak, largely driven by consumers’ continued assessment of current labor market conditions,” Parker Ross, global chief economist at Arch Capital Group, wrote on X, formerly known as Twitter.
“The measure I track most closely in the report, the labor market gap — the net share of those reporting that jobs are plentiful and those that are hard to find — posted its worst monthly decline in six months, extending a trend that suggests the unemployment rate will continue to rise,” he added.
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Wealthy Americans were more confident, while poorer Americans were less confident.
In particular, other consumer sentiment data showed that: Roger’s photo Recently.
“The decline in confidence was steepest for consumers ages 35 to 54. As a result, the 35 to 54 age group remains the least confident on a six-month rolling average, while consumers under 35 remain the most confident,” Peterson said. “Confidence declined across most income groups in September, with consumers making less than $50,000 experiencing the largest declines. Consumers making more than $100,000 remained the most confident on a six-month rolling average.”
Co-published with permission from Center Square.
