Consumer confidence plummets to worst decline in three years

Consumer confidence experienced its biggest drop in more than three years in September, an alarming sign that Americans are losing even more faith in the nation's economic stability. This drop is a reflection on the weakening labor market. This has been proven with official data. This growing pessimism about future business and income conditions raises serious questions about the country’s economic direction.

The Conference Board reported that its consumer confidence index sank to 98.7 in September, down from 105.6 previously recorded. The decline puts the index at its lowest level in two years. Economists had only forecast a slight drop to 103. Board member Dana Peterson said:

"September's drop was the largest since August 2021 (...) Consumers' assessments of current business conditions turned negative, while views on the current state of the labor market softened further. Consumers were also more pessimistic about future labor market conditions and less positive about future business conditions and future income."

Business owners' expectations have also declined

The report details that the current situation index (which measures consumers' perceptions of business and labor market conditions) registered a 10.3-point drop down to 124.3. Meanwhile, the expectations index (which assesses the short-term economic outlook) also showed a 4.6 point decline to 81.7 (and approaching the 80 threshold that has historically been a sign of a recession).

The growing economic uncertainty also coincides with a decline in business optimism, as reported Monday by S&P Global. The data reveal that business owners' expectations have also declined.