By Jeffry Bartash
The numbers: Confidence in the economy slumped in September to a seven-month low owing to the fast spread of delta and a bout of high inflation that’s raised the cost of new cars, appliances and other popular products.
The closely followed index of consumer confidence slid to 109.3 this month from a revised 115.2 in August, the Conference Board said Tuesday . It’s the lowest reading since February.
Economists polled by The Wall Street Journal had forecast a reading of 115.3.
“These back-to-back declines suggest consumers have grown more cautious and are likely to curtail spending going forward,” said Lynn Franco, senior director of economic indicators at the board.
Big picture: The economy was partly knocked off track toward the end of summer by the delta strain of the coronavirus, but with caseloads now falling rapidly, the scare might end soon. That should help boost the spirits of Americans and get the recovery back on track.
Worries about inflation are still high, though, and consumers are putting off big purchases because of high prices. There is some sign that price pressures are starting to ease, but inflation is likely to remain elevated through next year.
Key details: Part of the survey that tracks how consumers feel about the economy fell to 143.4 from 148.9 in the prior month. Although it’s fallen two straight months, it’s not far off from a pandemic peak set in June.
A gauge that assesses how Americans view the next six months was weaker. The so-called future expectations index slid to 86.6 from 92.8 to mark the lowest level since January.
The lack of confidence in the economy did not extend to the jobs market. Some 55.9% of those surveyed said jobs “are plentiful.”
A strong labor market is always a sign of an improved economy, even if consumer confidence doesn’t quite measure up.
What they are saying? Consumer confidence was “dragged down by delta wave cases and deaths, but given that wave seems to be cresting, there’s hope confidence just hit its nadir,” said corporate economist Robert Frick of Navy Federal Credit Union. “And even at its current level, the consumer confidence Index is still well above the historical norm.”
Market reaction: The Dow Jones Industrial Average (DOW:DJIA) and S&P 500 (S&P:SPX) fell sharply in Tuesday trades.