By Casey Harper (The Center Square)
A recent report has shown a significant drop in Americans’ confidence in the economy for the month of September. According to the data released by The Conference Board, the Consumer Confidence Index fell from 105.6 in August to 98.7 in September, marking the largest one-month decline since August of 2021.
The Chief Economist at The Conference Board, Dana Peterson, expressed concern over the sharp decline, stating, “Consumer confidence dropped in September to near the bottom of the narrow range that has prevailed over the past two years.” Peterson highlighted that all five components of the Index deteriorated, with consumers’ assessments of current business conditions turning negative and views of the labor market situation softening further.
Earlier this year, the federal government revised its data on job creation in the U.S. economy, revealing that it had significantly overestimated the number of jobs created last year. This revelation indicated a weaker labor market than previously thought, with 818,000 fewer jobs created, marking a 30% reduction in the job creation figures.
Concerns about future labor market conditions, business conditions, and income also contributed to the decline in consumer confidence. Despite a slowdown in inflation from earlier peaks during the Biden administration, prices remain elevated, having risen by over 20% since President Joe Biden took office.
Parker Ross, Global Chief Economist at Arch Capital Group, noted the downbeat tone of the recent Consumer Confidence report, emphasizing the continued deterioration in consumers’ assessment of the present labor market situation.
Wealthier Americans maintained more confidence in the economy compared to their lower-income counterparts. However, consumer sentiment data has shown varying perspectives, with some indicators painting a rosier picture recently.
Peterson highlighted the age and income group disparities in confidence levels, noting that consumers aged 35 to 54 experienced the steepest drop in confidence. On a six-month moving average basis, the 35–54 age group became the least confident, while consumers under 35 remained the most confident. Income groups also showed fluctuations in confidence, with those earning less than $50K experiencing the largest decrease.
Syndicated with permission from The Center Square.
