US consumer confidence drops for second straight month, recession fears rise
Americans stressed over inflation, political climate and high interest rates
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Consumer confidence fell again in September as Americans expressed greater concern that the economy could be headed for a recession.
The Conference Board's Consumer Confidence Index dropped to 103 this month, lower than the 105.5 reading analysts surveyed by Refinitv expected and the second straight decline following a two-and-a-half-year high of 114 in July.
A shopper makes their way through a grocery store on July 12, 2023 in Miami, Florida. U.S. consumer confidence fell in September for a second straight month. ((Photo by Joe Raedle/Getty Images) / Getty Images)
Confidence remains well below a post-pandemic peak of 128.9 in June 2021, as consumers continue to grapple with high inflation, rising interest rates and recession fears.
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The Expectations Index indicating consumers' short-term optimism for the economy also fell for a second straight month in September, dropping to 73.7 from 83.3 in August. Historically, when the index drops below 80, it signals a recession within the next 12 months, the think tank said.
A dealer puts up a sign in a used car for sale at a dealership in Richmond, California, US, on Tuesday, Feb. 21, 2023. Rising prices for vehicles, housing and everyday goods continue to squeeze U.S. consumers. (Photographer: David Paul Morris/Bloomberg via Getty Images / Getty Images)
The proportion of respondents who said a recession is "somewhat" or "very likely" rose in September, after declining in August.
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"Write-in responses showed that consumers continued to be preoccupied with rising prices in general, and for groceries and gasoline in particular," Conference Board chief economist Dana Peterson said.
A customer pumps gas at a gas station on September 13, 2023, in Petaluma, California. According to a report by the Labor Department, surging gas prices in August contributed to a rise in inflation as consumer spending rose to 3.7 from 3.2 percent in ((Photo by Justin Sullivan/Getty Images) / Getty Images)
"Consumers also expressed concerns about the political situation and higher interest rates," Peterson continued. "The decline in consumer confidence was evident across all age groups, and notably among consumers with household incomes of $50,000 or more."
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The findings also pointed to signs of rising concerns about current household finances. The share of consumers who said they were in a "good" situation fell, and the proportion citing "bad" conditions increased.