Consumer confidence declined in September as Americans became increasingly concerned about a cooling labor market.
The latest reading from the Conference Board was 98.7, lower than August’s reading of 105.6 and lower than expected by 104 economists surveyed by Bloomberg. The drop in consumer confidence between August and September was the largest drop since August 2021, according to the Conference Board.
“Consumers’ assessment of the current economic situation has turned negative, while views on current labor market conditions have softened further,” Dana Peterson, chief economist at the Conference Board, said in a statement. Ta. “Consumers were also more pessimistic about future labor market conditions and less positive about the future economy and future incomes.”
The deadline for the announcement was September 17th, so respondents completed the survey before the Fed announced on September 18th that it would cut the benchmark interest rate by 0.5 percentage point. However, there were some signs of softening in the labor market. before the consumer responds.
Read more: How Fed Rate Cuts Affect Bank Accounts, CDs, Loans, and Credit Cards
The unemployment rate rose steadily throughout 2024 and remains at 4.2%, just below its highest level in nearly three years. Meanwhile, the number of job openings in July fell to the lowest level since January 2021.
Last Wednesday, Federal Reserve Chairman Jerome Powell acknowledged that the risk of a further slowdown in the labor market is growing. But for now, he sees the labor market as “really strong.”
Chairman Powell said, “The U.S. economy is in good shape.” “We’re growing at a solid pace. Inflation is coming down. The labor market is in good shape. We want to keep it that way. That’s what we’re doing (by cutting interest rates).” Ta.
Still, respondents to September’s Consumer Confidence Survey are clearly feeling the effects of a labor market where fewer businesses are looking to hire new workers. In September, 18.3% of consumers said it was “difficult to find” a job, up from 16.8% the previous month. The labor market gap, which measures the difference between consumers who think jobs are “abundant” and those who think they are “hard to get,” is at its lowest since March 2021.
Confidence is down, but are consumers still spending? Apple’s Manhattan Fifth Avenue store. (AP Photo/Pamela Smith) (ASSOCIATED PRESS)
“The continued decline in this indicator is a clear sign that the labor market is not as tight as it once was,” Wells Fargo economist Shannon Seeley Grein said in a note to clients on Tuesday. . “However, we are hesitant to place too much weight on this data given that broad-based confidence indicators have remained weak this cycle despite a recovery in household spending habits. There is.”
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Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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