US consumer confidence unexpectedly weakened this month as the spread of COVID-19 infections increased concerns about the economic recovery in the coming months.
The Conference Board said its consumer confidence index plunged to 109.3 in September from an upwardly revised 115.2 in August. Analysts' expected the index to inch up to 114.8 from the 113.8 originally reported for the previous month. That was the third straight decline and the lowest level since February. The present situation index fell to 143.4 in September from 148.9 in the previous month. The expectations index also fell to 86.6 in September from 92.8 in August, as consumers' optimism about the short-term business conditions outlook eroded further.
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Confidence among U.S. consumers fell in September for the third consecutive month. Source: Bloomberg via Zerohedge
"Consumer confidence dropped in September as the spread of the Delta variant continued to dampen optimism," said Lynn Franco, senior director of economic indicators at the Conference Board. "Concerns about the state of the economy and short-term growth prospects deepened, while spending intentions for homes, autos, and major appliances all retreated again. Short-term inflation concerns eased somewhat, but remain elevated. Consumer confidence is still high by historical levels – enough to support further growth in the near-term – but the Index has now fallen 19.6 points from the recent peak of 128.9 reached in June. These back-to-back declines suggest consumers have grown more cautious and are likely to curtail spending going forward."
Today’s data follows the University of Michigan’s preliminary consumer sentiment index, which rose slightly in early September but remained near 2011 lows. Back-to-back declines in confidence may portend a pullback in spending, which could surface in a government report on personal outlays later this week. The University of Michigan’s final September sentiment reading will also be released on Friday.
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