November 30, 2023

Brighton Journal

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US consumer confidence fell for the third month in a row despite a booming economy

US consumer confidence fell for the third month in a row despite a booming economy

Stephanie Keith/Bloomberg/Getty Images

The US economy grew at its fastest pace in nearly two years in the latest quarter thanks to a wave of consumer spending, which will be tested in the coming months.

New York

Americans are losing confidence about the economic outlook.

For the third month in a row, the Conference Board’s Consumer Confidence Index declined, falling to 102.6 in October from a rising level. Revised 104.3 in September. The index reached its second lowest level this year, falling slightly above May’s reading of 102.5, according to Conference Board data.

October’s decline came as “consumers continue to be preoccupied with rising prices in general, and grocery and gasoline prices in particular,” Dana Peterson, chief economist at the Conference Board, said in a statement Tuesday. “Consumers also expressed concerns about the political situation and rising interest rates,” she said, adding that “ The war between Israel and Hamas It also affected consumers’ views on the economy.

But the tentative deals the Big Three automakers reached with the UAW last week poised to end the crisis The longest car strike in 25 years This is likely to improve consumer confidence in the upcoming issuance, said Bill Adams, chief economist at Comerica Bank.

The decline in consumer confidence was not evident across all age groups and household income levels. Consumers under 35 felt slightly more optimistic about the state of the economy this month than last month. People over 55 showed the largest monthly decline in consumer confidence.

Meanwhile, consumers with household incomes between $25,000 and $35,000 saw the largest decline in confidence about the economy over the past month. In contrast, consumers with household incomes between $100,000 and $125,000 saw the biggest jump in confidence over the past month.

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The business body’s “expectations index” remained below 80 for the second month in a row and fell slightly to 75.6 in October from an upwardly revised 76.4 in September. This reflects “decreased confidence about future working conditions, job availability, and income,” Peterson said.

despite of Great third quarter GDP report Which showed that the economy grew at an annual rate of nearly 5% and with consumer spending remaining strong in the face of high interest rates, Americans are not ruling out a recession.

“More than two-thirds of consumers still say a recession is ‘somewhat’ or ‘very likely’ in October,” Peterson noted. The possibility of a recession is causing some consumers to rethink big-ticket purchases like homes, she said.

At the same time, House prices Mortgage rates are also on the rise with the average mortgage being a 30-year fixed rate close to 8%.

Although the report suggests consumers are “a bit more concerned about the future,” they are “holding up amid the headwinds,” said Jeffrey Roach, chief economist at LPL Financial.

The new data comes as Federal Reserve officials begin their two-day monetary policy meeting. The central bank is widely expected to announce on Wednesday that it will keep interest rates steady amid rising US bond yields.