The Consumer Confidence Report for September revealed concerning weakness in the U.S. economy. The Future Expectations Index fell -1.3 points to 73.4, remaining below the Conference Board’s “Recession Warning” Threshold of 80, and the Present Situation Index fell -7 points, the furthest in a year.
However, the most important message from the report comes from an underlying datapoint: Jobs Plentiful, which plummeted in the latest release. This subset of the report measures the percentage of respondents who believe jobs are abundant. It is a critical metric to watch, as a rapid decline in this figure has accompanied almost every recession since 1967. The steep drop-off in consumer assessments of the labor market is a concerning signal, and it could foreshadow that the September Jobs Report will come in weaker than investors are anticipating.
In addition to their gloomy views of the labor market, consumers reported increasing concerns regarding prices and inflation, and views of their current and future financial situation worsened.
This report is a clear warning that the economy could weaken in the coming months as rising costs and fewer jobs take a toll on consumer spending.