After a lackluster jobs report last month, Americans are less confident about short-term income and are spending less.
Americans are more pessimistic about the state of the United States economy after a weak jobs report showed cracks in the labour market.
The Conference Board said on Tuesday that its consumer confidence index fell to 97.4 this month from an upwardly revised 98.7 in July.
“Notably, consumers’ appraisal of current job availability declined for the eighth consecutive month,” said Stephanie Guichard, senior economist of global indicators at the Conference Board.
“Meanwhile, pessimism about future job availability inched up, and optimism about future income faded slightly.”
Consumers are worried about their income. The measure that showed short-term expectations of business conditions fell by 1.2 points to 74.8. The marker that usually signals a looming recession is 80.
Labour market fuels downturn
While unemployment and layoffs remain historically low, there has been a noticeable deterioration in the labour market this year with mounting evidence that people are having difficulty finding jobs.
US employers added 73,000 jobs in July, well short of the 115,000 analysts had expected. Worse, revisions by the Bureau of Labor Statistics to its May and June figures shaved 258,000 jobs off previous estimates, and the unemployment rate ticked up to 4.2 percent from 4.1 percent.
Another government report showed US employers posted 7.4 million job vacancies in June, down from 7.7 million in May. The number of people quitting their jobs – a sign of confidence in their prospects elsewhere – also fell.
More jobs data will come out next week when the government releases its August job gains and June job openings reports.
The Conference Board said the survey of consumers it uses to calculate its consumer confidence index found references to high prices and inflation increased again and were often mentioned in tandem with tariffs.
Other government data this month showed that while prices at the consumer level held fairly steady from June to July, US wholesale inflation surged unexpectedly last month.
President Donald Trump’s sweeping taxes on imports are also pushing costs up for consumers.
The share of consumers expecting a recession over the next year rose in August to the highest level since April when Trump’s tariff rollout began, the Conference Board said.
The share of survey respondents who said they intended to buy a car in the near future rose while those planning to buy a home remained stable after July’s decline.
The number of consumers saying they planned to buy big-ticket items, such as appliances, fell, but there were significant variations among product categories. Respondents who said they planned to take a vacation soon, either inside the US or abroad, also declined.
