A measure of consumer confidence retreated for a second straight month on less upbeat expectations for business and labor conditions.
The Conference Board reported its Consumer Confidence Index declined 5.7 points to 103 in August. While a measure of current conditions edged up, a measure of the short-term outlook dropped below a threshold that historically signals an impending recession.
“Consumers continue to be preoccupied with rising prices in general and for groceries and gasoline in particular. Consumers also expressed concerns about the political situation and higher interest rates,” said Dana Peterson, chief economist of the Conference Board.
The decline in confidence was evident across all age groups and was most notable for consumers with annual household incomes above $50,000, Peterson said.
Plans to purchase automobiles were flat, but remained at an elevated level, she said. Plans to purchase appliances continued to trend upward. But plans to buy homes continued to trend downward as a result of higher interest rates on mortgages.
Expectations for interest rates declined in September after surging, the prior month. But the outlook for stock prices continued to fall.
The proportion of consumers who said they consider a recession “somewhat” or “very likely” rose, Peterson said.
The New York-based think tank bases the index on the results of monthly household surveys.
Slightly more optimistic assessments of current business and labor conditions pushed up the present situation component of the index up four-tenths of a point to 147.1
The share of consumers who responded to the survey upon which the September index was based who called business conditions”good” fell six-tenths of a point to 20.9 percent. But the proportion of those who called conditions “bad” fell more— nine-tenths of a point to 16.4 percent.
The share of consumers who said jobs were “plentiful” rose a point to 40.9 percent. The proportion of those who said jobs were “hard to get” rose four-tenths of a point to 13.6 percent.
Less upbeat outlooks pulled down the expectations portion of the index 9.6 points. At 73.7, the latest reading is below 80, a level that historically signals a recession within the next year.
The proportion of consumers who said they expect business conditions to improve over the next six months declined 3.4 points to 14.1 percent. The share of those anticipating worsening conditions advanced 1.1 points to 18.4 percent.
The proportion of consumers who said they expect more jobs to become available in coming months fell two points to 15.5 percent. The share of those forecasting fewer jobs rose nine-tenths of a point to 18.9 percent.
While 16.3 percent of consumers said they expect their incomes to increase, 14.4 percent anticipated decreasing incomes.