U.S. Consumer Confidence Plummets in September Amid Rising Job Concerns

Consumer confidence across the United States declined in September amid ongoing concerns about the current state of the job market.
On Tuesday, the Conference Board, a business research group, released a report showing that its consumer confidence index levels fell to 98.7 in September, a decrease from the 105.6 figure recorded in August. According to the Conference Board, the decline seen in September was the largest month-to-month decrease since August 2021.
The survey was completed before the Federal Reserve unexpectedly decided to implement a larger-than-anticipated half-point interest rate cut last week. The Consumer Confidence Index tracks Americans’ perceptions of the current economic climate and their expectations for the next six months.
Americans’ short-term outlook for income, business and the job market dropped to 81.7 in August, down from 86.3 in July. A reading below 80 is often seen as an indicator of a possible recession on the horizon.
Dana Peterson, the Conference Board’s chief economist, said, “Consumers’ assessments of current business conditions turned negative while views of the current labor market situation softened further.”
Peterson also noted that consumers are currently more pessimistic about the future of the job market throughout the U.S.
The labor market has shown signs of weakening recently, with job numbers steadily decreasing over the past few months.
Employers added 142,000 jobs in August, a modest increase from July’s weaker gain of 89,000. The unemployment rate edged down to 4.2 percent from 4.3 percent, which had marked its highest point in nearly three years. Hiring figures for June and July were revised downward by a combined 86,000 jobs, with July’s numbers representing the smallest monthly gain since the pandemic began.
In addition to the sluggish job growth in July and August, the government revealed earlier this month that the U.S. economy added 818,000 fewer jobs between April 2023 and March than initially reported. This revision reinforces mounting evidence that the job market has been consistently cooling.
Weakening labor market data and easing inflation were key factors in the Federal Reserve’s decision to implement a 50-basis-point cut to its benchmark interest rate—twice the usual reduction.
The Federal Reserve’s rate cut brought its key interest rate down to around 4.8 percent from a two-decade high of 5.3 percent. The rate had remained at that level for 14 months as the Fed worked to combat the worst inflation in 40 years.
Inflation has since fallen sharply, dropping from a peak of 9.1 percent in mid-2022 to 2.5 percent in August, the lowest level in three years and close to the Fed’s 2 percent target.
This article includes reporting from the Associated Press.