United States: Consumer confidence drops sharply in September but remains optimistic
The Conference Board’s consumer confidence index unexpectedly dropped to 125.1 in September, from August’s revised figure of 134.2 (previously reported: 135.1). The index undershot market expectations of 133.0 but nevertheless remains comfortably above the 100-point threshold that separates consumer optimism from pessimism.
The sharp downturn in September was driven in part by households’ less optimistic assessment of their short-term income growth prospects. For September, only 19.0% of consumers saw their income as likely to improve in the coming months, compared with 24.7% in August. This decrease came amid a gloomier outlook regarding the labor market and the stock market.
Commenting on this month’s reading, Lynn Franco, senior director of economic indicators at The Conference Board, noted:
“Consumers were less positive in their assessment of current conditions and their expectations regarding the short-term outlook also weakened. The escalation in trade and tariff tensions in late August appears to have rattled consumers. However, this pattern of uncertainty and volatility has persisted for much of the year and it appears confidence is plateauing. While confidence could continue hovering around current levels for months to come, at some point this continued uncertainty will begin to diminish consumers’ confidence in the expansion.”