U.S. consumer confidence fell the most in three years in September as Americans continue to struggle with high prices and a shaky labor market.
Data released on Tuesday showed consumer confidence fell 6.9 points in September to 98.7, the biggest drop since August 2021. The data was well below economists' expectations. According to a Bloomberg survey.
According to the Conference Board, consumers most frequently cited high prices and inflation as factors influencing their view of the economy.
According to the Conference Board, the biggest declines in confidence were seen among people ages 35 to 54 and those earning less than $50,000 a year.
Cody Moore, head of growth strategy at Wealth E&P, said that while inflation appears to be subsiding, prices are still up more than 16% over the past three years as there are signs the job market is weakening.
“Consumers are worried not only about rising prices but also about job security coupled with the uncertainty of the upcoming election,” Moore told The Post.
Dana Peterson, chief economist at the Conference Board, said the decline in consumer confidence is likely related to the job market and “a reaction to reduced work hours, slowing salary growth and declining job openings, even as the labor market remains very healthy with low unemployment, few layoffs and high wages.”
The Federal Reserve cut interest rates by half a percentage point on Wednesday, at the high end of the range economists expected, but consumers won't see the benefit immediately.
“Especially the prices at the grocery stores. [store] “Gas prices will also continue to rise and it will take some time for interest rate cuts to trickle down to credit card rates and mortgages,” SMI Group CEO Kenin Spivak told the Post.
The Conference Board's index of consumer expectations for the next six months fell 4.6 points to 81.7, just above the level below 80 that usually indicates a recession.
The Current Situation Index fell 10.3 points to 124.3. Just 30.9% of consumers said employment was abundant in September, down from 32.7% in August and the longest monthly decline since the 2008 financial crisis.
“Despite recent interest rate cuts by the Federal Reserve, the harsh reality is that 50% of Americans have not started paying off their student loans. [loans]”Auto loan delinquencies are at a 20-year high, and Americans have $1.14 trillion in outstanding credit,” Ted Jenkin, a business consultant and co-founder of Oxygen Financial, told The Post.
Ken Mahoney, CEO of Mahoney Asset Management, noted that basic necessities such as food, housing, gas and electricity are much more expensive than they were just a few years ago.
“The public is starting to see cracks in the job market and this report could be a sign of worse things to come,” Mahoney said. “But only time will tell as we get more data.”
“It usually takes 30 days for the true effects of interest rate cuts to be seen, so it's no wonder Americans haven't been all that excited since the Fed cut interest rates last week.”
Analysts have previously told The Post that it often takes a month for consumers to see the benefits of lower interest rates on credit cards and auto loans, and up to 90 days for mortgages.
Peterson said there has been a “slight increase” in the share of consumers who believe the economy is currently in a recession.
