Consumer Confidence Tumbles Again On Plunging Expectations

US consumer confidence slipped in September, according to this month’s update on the Conference Board gauge.

At 103, the headline printed below estimates. Consensus wanted 105.5.

It was the second consecutive monthly decline. Recall that the prior month’s drop, a near eight-point plunge as initially reported, was the largest in years.

August’s headline was revised higher on Tuesday, but not by enough to change the narrative. The gauge has now declined more than five points for two months running.

The figure shows a meaningful about-face. Note that the June-July bump is now erased.

The expectations index plummeted to 73.7, down nearly 10 points from August and well below the 80 level indicative of a looming recession. The present situation gauge was mostly unchanged.

Not surprisingly, consumers are still vexed by the high cost of groceries and gas. (It’s incredible how persnickety people can be: As though food and fuel are somehow necessities.)

Also on Americans’ list of concerns, according to Conference Board chief economist Dana Peterson: “The political situation and higher interest rates.”

The labor differential was 27.3. That was a small improvement, but it doesn’t move any needles. Long story short, more people thought jobs were “plentiful” this month, but the ranks of those describing jobs as “hard to get” rose marginally too. So, it was a wash.

“Consumers may be hearing more bad news about corporate earnings, while job openings are narrowing and interest rates continue to rise,” Peterson went on.

Call me crazy, but that doesn’t sound like a recipe for success. With pandemic savings buffers now mostly depleted, you don’t have to be any sort of committed “doomer” to gently suggest that consumers are poised to retrench, even as household balance sheets remain generally healthy.

Needless to say, a government shutdown won’t help matters.