by Fears of a recession continue to rise amid high interest rates, rising prices
WASHINGTON — Consumer confidence fell again in September, the Conference Board reported last week, continuing a cycle of concerns about the economy and tensions around the globe.
The index fell to 103 from an upwardly revised 108.7 in August while the Present Situation Index rose slightly to 147.1 from 146.7 in August. The Present Situation Index is based on consumers’ take on current business and labor market conditions. The Expectations Index, based on consumers’ short-term outlook for income business and labor market conditions, declined to 73.7 from 83.3 in August. Expectations below 80 typically signal a recession within the next year.
Dana Peterson, chief economist for the Conference Board, said that the decline in September was the second consecutive drop in the past two months. Peterson noted that it occurred across all age groups, as well as consumers with incomes of $50,000 or more.
Of the results, Peterson added, “September’s disappointing headline number reflected another decline in the Expectations Index, as the Present Situation Index was little changed. Write-in responses showed that consumers continued to be preoccupied with rising prices in general and for groceries and gasoline in particular. Consumers also expressed concerns about the political situation and higher interest rates.”
Other takeaways from the latest report were as follows:
+ Of their Present Situation, 20.9% of consumers said business conditions were good, down from 21.5% in August, while 16.4% said business conditions were bad, down from 17.3% in August.
+ Of the labor market in particular, 40.9% of consumers said that jobs were plentiful, up a point from 39.9% in August.
+ 13.6% said that jobs were hard to get, up from 13.2% in August.
+ Of expectations six months from now, 14.1% of consumers expect business conditions to improve, down from 17.5% in August, while 18.4% expect business conditions to worsen, up from 17.3%.
+ 15.5% of consumers said that they expect more jobs to be available over the short term, down from 17.5% in August, and 18.9% anticipate fewer jobs, up from 18% in August.
+ Of their short-term income prospects, some 16.3% of consumers expect their incomes to increase over the next six months, down from 18.7% in August, and 14.4% expect their incomes will decrease, up from 11.9% in August.
Peterson said that consumer assessments of their present situation was little changed overall due to “divergent views on the state of business conditions and job availability,” adding, “Fewer consumers said that business conditions were good, but fewer also said they were bad. Regarding the employment situation, slightly more consumers said that jobs were plentiful, but also slightly more said that jobs were hard to get.
Peterson added that expectations for the next six months fell below the recession threshold of 80, “reflecting less confidence about business conditions, job availability and incomes. Consumers may be hearing more bad news about corporate earnings, while job openings are narrowing, and interest rates continue to rise — making big-ticket items more expensive. Expectations for interest rates declined in September after surging in the prior month, but the outlook for stock prices continued to fall.”
The expected family financial situation for six months from now, which is not included in the Expectations Index, also fell, with the proportion of consumers expecting a recession — as somewhat or more likely — rising in September.
“The fluctuating soundings likely reflect ongoing uncertainty given mixed buying plans,” Peterson said. “On a six-month moving average basis, plans to purchase autos were flat but remained at an elevated level, while plans to purchase appliances continued to trend upward. But plans to buy homes — more in line with rising interest rates, continued to trend downward.”
