Consumer confidence fell for a third consecutive month in September, as concerns about the Delta variant and higher prices continued to dampen optimism. Spending intentions for homes, cars, and major appliances all retreated. However, consumer confidence was still at a high level and the consumer price index has shown signs of easing inflation.
The Consumer Confidence Index, reported by the Conference Board, dropped 5.9 points from 115.2 to 109.3 in September, the lowest level since March. The Present Situation Index decreased 5.5 points from 148.9 to 143.4, and the Expectation Situation Index declined 6.2points from 92.8 to 86.6.
Consumers’ assessment of current business conditions weakened in September. The shares of respondents rating business conditions “good” fell by 0.9 percentage points to 19.3%, while those claiming business conditions “bad” rose by 1.3 percentage points to 25.4%. Meanwhile, consumers’ assessment of the labor market was also less favorable. The share of respondents reporting that jobs were “plentiful” increased by 0.3 percentage points, while those saw jobs as “hard to get” rose by 2.2 percentage points.
Consumers were less optimistic about the short-term outlook. The share of respondents expecting business conditions to improve declined from 23.4% to 21.5%, while those expecting business conditions to deteriorate climbed from 17.4% to 17.63%. Similarly, expectations of employment over the next six months were less favorable. The share of respondents expecting “more jobs” fell by 1.6 percentage points to 21.5%, while those anticipating “fewer jobs” rose by 2.3 percentage points to 20.3%.
The Conference Board also reported the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home dropped to 5.6% in September. The share of respondents planning to buy a newly constructed home and for those who planning to buy an existing home stayed unchanged at 0.5% and 2.1%. Surging home prices and lack of inventory could further harm affordability and hinder ownership opportunities.