Consumers' view of the economy plunged in September, posting the biggest drop in more than three years as concerns about jobs and business conditions rose, the Conference Board reported on Tuesday.
The agency's Consumer Confidence Index fell to 98.7, compared to 105.6 in August, the biggest one-month decline since August 2021. The Dow Jones Consensus had expected a reading of 104. In contrast, the index read 132.6 in February 2020, a month before the Covid pandemic hit.
Each of the five components assessed by the organization saw declines this month, with the biggest drops among those aged 35-54 and earning less than $50,000.
"Consumers' assessment of the current business situation is negative, while the view of the current labor market situation is getting weaker. Consumers are also more pessimistic about future labor market conditions and less positive about future business conditions and earnings," said Dana Peterson, chief economist at The Conference Board.
The last time the confidence index recorded a major decline was when inflation was just starting to rise to its highest level in more than 40 years.
Stocks suffered slight losses after the report, while Treasury yields fell slightly. Apart from the sharp fall in the confidence index, the Current Situation measure slipped by 10.3 points to 124.3 and the Expectations Index fell 4.6 points to 81.7. On a measure of expectations, a reading below 80 is consistent with an economic recession.
Respondents' concerns focused mainly on jobs and inflation. On inflation, the 12-month forecast rose to 5.2%, with concerns about rising prices topping the list of economic worries.
