Confidence among American consumers slipped in September.

“Slipped” is a bit euphemistic. “Deteriorated” is probably better. If I relied on clicks and web traffic to keep the lights on (God bless the tabloids) I might say “plunged.” Or “PLUNGED!”

Anyway, the Conference Board’s gauge dropped sharply this month, particularly when measured against an upwardly-revised reading for August. 98.7 on the headline was nowhere near consensus. Economists collectively saw 104. The decline, almost seven points, was the most pronounced in three years.

The dour reading came on the heels of what it’s probably fair to characterize as a Kamala honeymoon. With Tuesday’s upward revision, the headline rose nearly eight points across the prior two months. That fillip’s almost all gone now.

Conference Board chief economist Dana Peterson blamed a worsening labor market outlook for this month’s slippage. “[V]iews of the current labor market situation softened further,” she said Tuesday. “Consumers were also more pessimistic about future labor market conditions.” The labor differential fell to 12.6, the lowest in over three years. The drop was the eighth straight.

The release “suggests households are noticing the jobs market is cooling quickly,” ING’s James Knightley remarked. “Historically this has been a major warning signal that unemployment is going to rise.”

As ever, I think it’s important to acknowledge that consumer moods — and particularly their expectations — are informed by experience and what they hear from the media. If you’re reading every day about a deteriorating labor market and someone asks you how the labor market’s doing, you’re likely to say “poorly.”

According to a lot of Americans, the US is in a recession right now and has been for four years running. Some of that’s the overhang from inflation. High prices are insult to injury for lower-income households, which are always in a recession almost by definition. But some of it’s the media. Bad news, bad news, bad news (clicks, clicks, clicks) begets poor sentiment.

That said, I’d be remiss to acknowledge that the updated read on the labor differential in the Conference Board survey does, in fact, point to additional softening in the jobs market, which in turn increases the odds of more aggressive Fed easing. Cue Albert Edwards, the only permabear I can suffer:

A naive (or not) reading of the historical relationship between the jobless rate and that spread — i.e., the jobs are “plentiful” versus “hard to get” spread in the Conference Board release — suggests the UNR might have a date with ~5% in the not-so-distant future. If that were to materialize, so would additional 50bps rate cuts.

Oh, and if you’re wondering who’s feeling worst in America, it’s the poor people. “Consumers earning less than $50,000 experienc[ed] the largest decrease,” Peterson remarked, adding that when measured on a six-month rolling basis, consumers earning over $100,000 “remained the most confident.”

Money can’t buy happiness. But it can buy confidence.