scorecardAmericans are feeling worse about the economy, with confidence diving to a 4-month low
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Americans are feeling worse about the economy, with confidence diving to a 4-month low

George Glover   

Americans are feeling worse about the economy, with confidence diving to a 4-month low
Investment1 min read
  • US consumer confidence fell to a four-month low in September, the Conference Board said Tuesday.
  • That's a sign Americans are feeling worse about the economy.

Americans continue to sour on the economy, with inflation still elevated and the Federal Reserve expected to keep interest rates high until deep into 2024.

The US consumer confidence index, which measures how people are feeling about their own financial health and spending power, slipped to a four-month low in September, the Conference Board said Tuesday.

The gauge fell to 103.0, down from 108.7 in August and well below the 105.5 reading that economists polled by Reuters were expecting.

Confidence slipped across every age group, according to the Conference Board, with the drop most pronounced among Americans earning upwards of $50,000 a year.

Their gloomier outlook might reflect the continued rise in living costs – the Consumer Price Index showed price growth accelerated in both July and August – and the Fed signaling that it'll keep borrowing costs high in order to bring inflation down to its 2% target.

Fewer Americans expect they'll be able to buy a house, the data also showed. The Fed's aggressive tightening campaign having driven the average 30-year fixed-rate mortgage to a 22-year high of 7.2%, according to the St Louis Federal Reserve.

Despite the pessimism, there are signs the economy is doing well, with second-quarter growth smashing forecasters' expectations and the unemployment rate still holding steady at under 4%.

The stream of positive data hasn't filtered through to consumers, though – and Wall Street is also worrying about several one-off factors that could rattle the economy over the rest of 2023.

Student loans, labor strikes, and a looming government shutdown could all drag down growth in the fourth quarter, Goldman Sachs warned earlier this month.

The bank – which says there's just a 1-in-7 chance of a US recession over the next 12 months – expects the trio of factors to mean the economy expands by just 0.6% over the three months ending December 31.




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