The Conference Board measure of consumer confidence has fallen to 81.9 in September from 88.6 in August (the consensus forecast was 89.0). The current conditions index fell 8 points and expectations dropped 6 points. The headline reading was weaker than every forecast in the survey and leaves sentiment at a 12-year low. The details show anxiety about both the cost of living, mainly reflecting rising motor fuel costs, and job security, with the labour differential – the proportion of people saying jobs are plentiful less the proportion saying jobs are hard to get – being the weakest since March 2021.
The chart below suggests the latest reading has historically been consistent with consumer spending falling, but clearly the relationship has weakened over the past couple of years. Consumer confidence reflects the median household, which is concerned about weak income growth, job security and high prices. However, higher income households, boosted by years of substantial property and stock market gains, are spending strongly.
