US consumer sentiment is at its lowest level in four months. According to data released on Tuesday, the critical economic indicator fell to its lowest level in four months in September. Rising petroleum prices and high-interest rates increased economic uncertainty and dampened consumer confidence.
The Conference Board’s Consumer Confidence Index declined for a second consecutive month in September, falling to 103 from an upwardly revised 108.7 in August. According to data from the Conference Board, the index is at its second-lowest level of the year, just above May’s reading of 102.5.
Read more: Russia Lifts Export Ban On Low-Quality Diesel.
Dana Peterson, the chief economist at the Conference Board, stated, “Consumers continued to be concerned about rising prices in general and for groceries and gasoline in particular.” Additionally, consumers expressed concern about the political climate and rising interest rates. The decline in consumer confidence was observable across all age categories, but especially among those with household incomes of $50,000 or more.
Peterson noted that the business organization’s ” Expectations Index ” fell below 80 — a threshold often indicating an impending recession — to 73.7, reflecting less optimism regarding future business conditions, job availability, and incomes.
She stated, “Consumers may hear more bad news about corporate earnings while job openings are shrinking and interest rates continue to rise, increasing the price of expensive items.” “Interest rate forecasts decreased in September after surging the previous month, but stock price forecasts continued to decline.”
After declining in August, the proportion of consumers who believe a recession is “somewhat likely” or “very likely” increased in September.
Headwinds are increasing as still-high inflation, decades-high interest rates, rising credit card debt, a declining labor market, and the return of student loan payments continue to weigh on consumers.
According to a Tuesday commentary by Matthew Martin, US economist for Oxford Economics, the most recent reading from the Conference Board reinforces expectations that consumers will reduce spending in the fourth quarter of this year.
Consumer spending is a crucial driver of economic development in the United States.