Consumer confidence hit a 12-year low in September, according to new Conference Board data out Tuesday. Worries about spiking gas and other prices weighed heavily on American consumers, fewer of whom planned to make big purchases like cars, homes and appliances. The decline in confidence held true across age, income and region. Meanwhile, job openings dropped to 7.1 million in August — suggesting, per economist Tuan Nguyen, that "we will experience a period of stagflation-lite for the rest of the year."
The Conference Board's Consumer Confidence Index dropped 6.7 points in September to 81.9 (versus a forecast of rising slightly to 89.0). Besides falling to its lowest level since 2014, this is also its steepest slide in months, as a mix of the recent Fed rate hike, surging fuel costs and geopolitical tensions weighed on households:
> Expectations Index: Down 5.9 points to 63.6, its third straight monthly decline and well below the 80 threshold that has historically signaled a recession ahead
> Present Situation Index: Down 7.9 points to 109.3
> Business conditions turned net negative (–1.9%) for the first time since September 2024
> The labor market differential shrank to just +1.7%, meaning plentiful jobs barely outnumbered jobs that are hard to get
> 12-month inflation expectations rose to 6.1%, and 68.4% of consumers expect higher interest rates ahead, up 5.2 points in a single month
> More households now rate their finances as bad than good -- only the second time that has happened since the question was added four years ago
> By generation, confidence for Gen Z, followed by Millennials, remained the highest on a six-month moving average basis. Meanwhile, confidence among the three oldest generations (Generation X, Baby Boomers, and the Silent Generation) continued to weaken .
Another JOLTs report in which the main headline was...not much changed, and job movement rates feel much like the early recovery after the Great Financial Crisis.
📈 August's strong jobs report didn't seem to trickle down much into a high hires rate. It came back at 3.3% - exactly the average we've seen over the past two years.
💼 Similarly, neither the rates of job openings (at 4.3% ) nor quits (at 1.9%) changed from last month's figures.
🥘 Hires and quits rates have dropped from their pre-pandemic averages in every industry, with leisure and hospitality, construction, and business services showing the biggest falls and education/healthcare the lowest. Leisure and hospitality had a huge boom immediately after covid, when employers struggled to find enough employees and wages were growing fastest for those at the bottom of the market, but this shows those days are definitely behind us now. And it's no surprise that education and healthcare are performing the best - healthcare has been one of the standouts in the jobs market for months now.
💻 We don't have seasonally adjusted rates for information, which includes tech, publishing, and film (all industries whose employment has fallen rapidly in the last three years), but my guess is if we did, it would be near the top of the pack in falls in hiring and quits. We can see in the employment data that it's persistently been weak.
☀️ The underappreciated bright side is that the overall job market isn't getting any weaker and hasn't been for months now. The downside is that the weakness seems to be persistent. It reminds me of how inflation stayed consistently low post GFC, even with the Fed keeping interest rates near zero for years. It wasn't until the impact of a global pandemic hit that we saw anything different. Are we going to need something similarly drastic similar here?