Consumer confidence tumbled in September as Americans grew increasingly worried about the labor market.
The latest index reading from the Conference Board was 98.7, below the 105.6 seen in August and lower than what the 104 economists surveyed by Bloomberg expected. The drop in consumer confidence from August to September was the largest month-over-month decline since August 2021, according to The Conference Board.
“Consumers’ assessments of current business conditions turned negative while views of the current labor market situation softened further,” The Conference Board chief economist Dana Peterson said in the release. “Consumers were also more pessimistic about future labor market conditions and less positive about future business conditions and future income.”
The cutoff date for the release was Sept. 17, meaning respondents replied to the survey before the Fed announced it would cut its benchmark interest rate by half a percentage point on Sept. 18. But there had been several signs of softening in the labor market before consumers replied.
The unemployment has steadily risen throughout 2024 and sits at 4.2%, just below its highest level in almost three years. Meanwhile, job openings in August were at their lowest level since January 2021.
In the September Consumer Confidence survey, 18.3% of consumers said jobs were “hard to get,” up from 16.8%.
Peterson added, “The deterioration across the Index’s main components likely reflected consumers concerns about the labor market and reactions to fewer hours, slower payroll increases, fewer job openings — even if the labor market remains quite healthy, with low unemployment, few layoffs and elevated wages. The proportion of consumers anticipating a recession over the next 12 months remained low but there was a slight uptick in the percentage of consumers believing the economy was already in recession.”