US Consumer Confidence Nosedives Amid Growing Concerns Over Job Security

U.S. consumer confidence took a sharp dive in September, driven by rising concerns over job security and a softening labor market.
The Conference Board reported on Sept. 24 that its consumer confidence index fell to 98.7, down from a revised 105.6 in August, marking the steepest drop in just over three years.
In this month’s index, all five components—current business and employment conditions, future business and job market expectations, and income outlook—deteriorated, reflecting widespread consumer pessimism.
“Consumers’ assessments of current business conditions turned negative while views of the current labor market situation softened further,” Dana Peterson, chief economist at The Conference Board, said in a statement. “Consumers were also more pessimistic about future labor market conditions and less positive about future business conditions and future income.”
The labor market was central to consumers’ concerns in September. The present situation index, which gauges current business and labor conditions, dropped by 10.3 points to 124.3. The expectations index, which measures consumer sentiment about short-term income, business, and job prospects, slid by 4.6 points to 81.7, just above the critical 80 threshold, which often signals a looming recession.
“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,” Peterson said.
The sharpest decline in confidence was seen among consumers aged 35 to 54, who are typically in their peak earning years and most sensitive to labor market shifts. Confidence also fell across income groups, particularly among households earning less than $50,000 annually.
The S&P Global Manufacturing PMI fell to 47.0, its lowest point in 15 months, with the reading indicating that factory activity is shrinking at an accelerating pace. The labor market in the manufacturing sector also showed signs of stress, with job losses accelerating at the fastest pace in over 14 years, excluding the period during the COVID-19 pandemic.
The Conference Board’s latest sentiment report shows that fewer respondents reported confidence in their family’s financial situation in September than in the prior month. Plans for big-ticket purchases such as appliances, smartphones, and laptops eased, although there was a slight uptick in home and car buying intentions.
The risk of recession also weighed more heavily on the minds of consumers in September, The Conference Board report indicates.
“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,” Peterson said.
“It’s never good to see consumer confidence fall this much,” Jamie Cox, managing partner for Harris Financial Group, said in a statement to The Epoch Times. “Consumers are clearly concerned about the implications of the upcoming election, the increasing conflict around the world, and the stubbornly high cost of food and credit.”
The sharp drop in consumer confidence also clouds the outlook for consumer spending, a key driver of the U.S. economy, though it could help keep inflationary pressures in check.
“Keep in mind lower confidence may mean lower consumer spending; less demand will continue to bring down inflation,” Gina Bolvin, president of Bolvin Wealth Management Group, said in a statement to The Epoch Times. “Over time, this will continue to help the consumer.”