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Shoppers also expressed concern about rising prices, higher interest rates, and political uncertainty.
The Conference Board’s consumer confidence index fell to 103 in September from 108.7 in August.
New York—U.S. consumer confidence fell again in September, marking the second consecutive month of decline as recession fears heighten.
The Conference Board’s consumer confidence index decreased to 103 in September from a slightly upwardly revised 108.7 in August.
“Write-in responses showed that consumers continued to be preoccupied with rising prices in general, and for groceries and gasoline in particular. Consumers also expressed concerns about the political situation and higher interest rates,” said Dana Peterson, chief economist at The Conference Board.
“The decline in consumer confidence was evident across all age groups, and notably among consumers with household incomes of $50,000 or more.”
The Present Situation Index, which measures consumers’ current view of business and labor market conditions, rose slightly to 147 from just under 147 in August.
“Assessments of the present situation were little changed overall, due to divergent views on the state of business conditions and job availability,” said Peterson.
Consumers’ view of current business conditions was a mixed bag in September, with the percentage of respondents who said current business conditions are “good” down to 21 percent from 22 percent in August, while those who said conditions are “bad” was down to 16 percent from 17 percent.
Consumers had a slightly more positive view of the current labor market.
The percentage of respondents who felt jobs were plentiful was up to 41 percent in September from 40 percent in August, while 14 percent said jobs were “hard to get” compared with 13 percent.
The Expectations Index, which measures consumers’ outlook for income, business, and labor market conditions in the near future, fell sharply to 74 from 83 in August.
When expectations fall below 80, that historically signals a recession within the next year, said the Conference Board, a prediction it announced in July.
“Consumer fears of an impending recession also ticked back up, consistent with the short and shallow economic contraction we anticipate for the first half of 2024,” it said.
Economist Peterson said the results reflected “less confidence about future business conditions, job availability, and incomes.”
The number of respondents saying a recession is “somewhat” or “very likely” rose in September after falling in August.
“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,” she said.
The month-to-month fluctuation of consumers’ recession predictions reflects uncertainty, she said, noting they have mixed buying plans for high-price items.
On a six-month moving average basis, plans to buy cars were flat while plans to buy appliances continued to trend upward.
However, plans to buy homes continued to trend downward, due in part to rising interest rates.
Looking at short-term business conditions, respondents’ outlooks were more pessimistic, with 14 percent expecting business conditions to improve, down from 18 percent in August.
More respondents expect business conditions to worsen—18 percent compared with 17 percent.
Consumers’ view of the short-term labor market also was bleaker.
Fewer respondents expect more jobs to be available, down to 16 from 18 percent.
Meanwhile, 19 percent expect there to be fewer jobs, up from 18 percent in August.
Consumers’ short-term income expectations were also down, as was their assessment of short-term income prospects.
Fewer respondents expect to see their incomes increase, down to 16 percent from 19 percent in August. Fourteen percent expect their incomes to decrease, up from 12 percent.
The Conference Board recently added a new set of questions to its monthly survey, asking consumers how they felt about their family finances.
In September, views of their families’ current financial situation and the situation six months from now worsened.
Expectations for lower interest rates declined in September after rising in August, while outlook for higher stock prices continued to fall, said Peterson.
“Notably, average 12-month inflation expectations have held steady over the past three months despite ongoing complaints about higher prices,” she said.
The consumer confidence results for October will be released on Oct. 31.
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