Consumer confidence drops as trade tensions mount

Lynn Franco

A monthly measure of consumer confidence has dropped even as concerns mount over the effects of trade and tariff disputes on business and labor conditions.

“The escalation in trade and tariff tensions in late August appears to have rattled consumers,” said Lynn Franco, senior director of economic indicators at the Conference Board. “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.”

The Conference Board reported its Consumer Confidence Index dropped 9.1 points to 125.1 in September. The business research and membership association bases the index on the results of monthly household surveys. Economists monitor the index because consumer spending accounts for more than two-thirds of economic activity.

For September, assessments of current business and labor conditions pulled the present situation component of the index down seven points to 169.

The proportion of consumers responding to the survey upon which the September index was based who described business conditions as “good” decreased 3.6 points to 37.3 percent. The share of consumers who characterized business conditions as “bad” increased 2.8 points to 12.7 percent.

The proportion of consumers who said jobs were “plentiful” fell 5.5 points to 44.8 percent. The share of those who called jobs “hard to get” slipped four-tenths of a point to 11.6 percent.

The short-term outlook pulled down the expectations component of the index  10.6 points to 95.8.

The share of consumers who said they expect business conditions to improve over the next six months fell 2.6 points to 19 percent. The proportion of those who said they expect worsening conditions rose 4.1 points to 14.3 percent.

The share of consumers who said they expect more jobs to become available in coming months decreased 2.4 points to 17.5 percent. The proportion of those anticipating fewer jobs increased 2 points to 15.7 percent.