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WASHINGTON – Consumer confidence and expectations took a sharp downward turn in September, according to the latest report from the Conference Board. The Consumer Confidence Index dropped to 103.0 from a revised 108.7 reported in August, and the Expectation Index fell nearly 10 points from 83.3 to 73.7, well below the 80-mark used to indicate an oncoming recession.
“Consumer confidence fell again in September 2023, marking two consecutive months of decline,” said Dana Peterson, chief economist at the Conference Board. “September’s disappointing headline number reflected another decline in the Expectations Index, as the Present Situation Index was little changed.”
The Present Situation Index increased slightly, from 146.7 to 147.1, indicating consumers feel much of the same in regard to current labor and business conditions. The trouble seems to lie in the outlook on the future, reflected in the drop of the Expectations Index.
“Expectations for the next six months tumbled back below the recession threshold of 80, reflecting less confidence about future business conditions, job availability, and incomes,” Peterson said. “Consumers may be hearing more bad news about corporate earnings, while job openings are narrowing, and interest rates continue to rise—making big-ticket items more expensive.”
Here are a few other points to note from the September report:
Consumers’ assessment of current business conditions was slightly less pessimistic in September.
- While 20.9% of consumers said business conditions were “good,” down from 21.5% in August.
- 16.4% said business conditions were “bad,” down from 17.3%.
Consumers’ appraisal of the labor market was slightly more positive in September.
- 40.9% of consumers said jobs were “plentiful,” up from 39.9% in August.
- But 13.6% of consumers said jobs were “hard to get,” up from 13.2% last month.
Consumers were less optimistic about the short-term business conditions outlook in September.
- 14.1% of consumers expect business conditions to improve, down from 17.5% in August.
- Meanwhile, 18.4% expect business conditions to worsen, up from 17.3%.
Consumers’ assessment of the short-term labor market outlook was less favorable in September.
- 15.5% of consumers expect more jobs to be available, down from 17.5% in August.
- 18.9% anticipate fewer jobs, up from 18%.
Consumers’ assessment of their short-term income prospects was more pessimistic in September.
- 16.3% of consumers expect their incomes to increase, down from 18.7% in August.
- Moreover, 14.4% expect their incomes will decrease, up from 11.9% last month.
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