Consumer confidence took a dive in September as growing economic concerns about the trade wars and the economy in general appeared to take a toll on consumers.
The Conference Board’s consumer confidence index fell to 125.1 in September from a downwardly revised 134.2 in August. It was the biggest drop in nine months.
Consumers were less positive in their assessment of current conditions and also in their expectations regarding the short-term outlook. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – decreased from 176.0 to 169.0. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – declined from 106.4 last month to 95.8 this month.
“The escalation in trade and tariff tensions in late August appears to have rattled consumers,” said Lynn Franco, senior director of economic indicators at The Conference Board. “However, this pattern of uncertainty and volatility has persisted for much of the year and it appears confidence is plateauing. While confidence could continue hovering around current levels for months to come, at some point this continued uncertainty will begin to diminish consumers’ confidence in the expansion.”
The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – declined from 106.4 last month to 95.8 this month.
Consumers’ appraisal of current-day conditions was somewhat less favorable in September. Those claiming business conditions are “good” decreased from 40.9% to 37.3%. Those saying business conditions are “bad” increased from 9.9% to 12.7%. Consumers’ assessment of the job market was also less favorable. Those saying jobs are “plentiful” decreased from 50.3% to 44.8%.
Consumers were also less optimistic about the short-term outlook in September. The percentage of consumers expecting business conditions will be better six months from now decreased from 21.6% to 19.0%. Those expecting business conditions will worsen increased from 10.2% to 14.3%. Consumers’ outlook for the labor market was also less upbeat. The proportion expecting more jobs in the months ahead decreased from 19.9% to 17.5%.