Casey Harper (Center Square)
Newly released data shows Americans’ confidence in the economy plummeted in September, the biggest one-month change since the COVID-19 pandemic began.
The Conference Board’s Consumer Sentiment Index, a gauge of how confident Americans are about the economy, plummeted 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 low end of the narrow range it has been in for the past two years,” Dana Peterson, chief economist at the Conference Board, said in a statement. “September’s decline was the biggest since August 2021, and all five components of the index worsened. Consumers’ assessment of current business conditions turned negative and their view of current labor market conditions weakened further.”
The federal government said 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 was much weaker last year than federal data had previously shown.
In fact, the U.S. economy created 818,000 fewer jobs than federal economists had previously projected, a drop of about 30 percent and the biggest employment data revision in the past 15 years.
“Consumers were also more pessimistic about future labor market conditions and less optimistic about future business conditions and their future incomes,” Peterson added.
Inflation has slowed from a ferocious start to the Biden administration, and the Federal Reserve announced its first interest rate cut since 2020. But prices remain elevated, having risen more than 20% since President Joe Biden took office.
“This morning’s Conference Board Consumer Confidence report was surprisingly gloomy, dragged down by a continued deterioration in consumers’ assessment of current labor market conditions,” Parker Ross, global chief economist at Arch Capital Group, wrote on X, formerly known as Twitter.
“The measure from the report that I pay most attention to – labor market inequality (i.e. the net percentage of jobs that are plentiful and not hard to get) – recorded its worst monthly decline in six months, continuing a trend that suggests the unemployment rate will continue to rise,” he added.
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Wealthy Americans became more confident, while poorer Americans became less confident.
Notably, other consumer sentiment data: Brighter photos recently.
“The decline in confidence was most pronounced among consumers ages 35-54. As a result, based on a six-month moving average, this age group remains the least trusting, while consumers under 35 remain the most trusting,” Peterson said. “Confidence declined across most income groups in September, with consumers earning less than $50,000 experiencing the greatest decline in confidence. Based on a six-month moving average, consumers earning more than $100,000 remain the most trusting.”
Distributed with permission From Centre Square.
