Tuesday, September 26, 2023
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Consumer Confidence Falls Again in September




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Consumer confidence saw another decline in September as consumers expressed growing concerns about the future, primarily driven by persistent inflation and expectations of higher interest rates lasting for an extended period.

The Consumer Confidence Index, reported by the Conference Board, fell 5.7 points from 108.7 to 103.0 in September, the lowest level since May 2023. The Present Situation Index rose 0.4 points from 146.7 to 147.1, and the Expectation Situation Index decreased 9.6 points from 83.3 to 73.7. Historically, a reading below 80 often signals a recession within a year.

Consumers’ assessment of current business conditions slightly improved in September. The share of respondents rating business conditions “good” fell by 0.6 percentage points to 20.9%, while those claiming business conditions “bad” declined by 0.9 percentage points to 16.4%. Meanwhile, consumers’ assessment of the labor market was also marginally more positive. The share of respondents reporting that jobs were “plentiful” increased by 1.0 percentage points, while those saw jobs as “hard to get” rose by 0.4 percentage points.

Consumers were less optimistic about the short-term outlook. The share of respondents expecting business conditions to improve fell from 17.5% to 14.1%, while those expecting business conditions to deteriorate rose from 17.3% to 18.4%. Similarly, expectations of employment over the next six months were less favorable. The share of respondents expecting “more jobs” decreased by 2.0 percentage points to 15.5%, and those anticipating “fewer jobs” increased by 0.9 percentage points to 18.9%.

The Conference Board also reported the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home declined to 4.9% in September. The share of respondents planning to buy a newly constructed home decreased to 0.4%, while for those who planning to buy an existing home slightly rose to 2.6%.



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