The Conference Board Consumer Confidence Index declined again in September to 103.0 (1985=100), down from 108.7 in August, marking two consecutive months of decline in that measure. Meantime, the Present Situation Index—based on consumers’ assessment of current business and labor market conditions—rose slightly to 147.1 (1985=100) from 146.7.
Looking ahead, the Expectations Index—based on consumers’ short-term outlook for income, business and labor market conditions—declined to 73.7 (1985=100) in September, after falling to 83.3 in August. Expectations fell back below 80—the level that historically signals a recession within the next year. Consumer fears of an impending recession also ticked back up, consistent with the short and shallow economic contraction we anticipate for the first half of 2024.
“Write-in responses showed that consumers continued to be preoccupied with rising prices in general, and for groceries and gasoline in particular,” said Dana Peterson, Chief Economist at The Conference Board, a non-partisan, non-profit think tank. “Consumers also expressed concerns about the political situation and higher interest rates. The decline in consumer confidence was evident across all age groups, and notably among consumers with household incomes of $50,000 or more.”
As a result, the proportion of consumers saying recession is “somewhat” or “very likely” rose in September after dropping in August. “The fluctuating soundings likely reflect ongoing uncertainty given mixed buying plans. 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.”
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