After an inactive employment report last month, Americans are less confident in their short-term income and spend less.
After weak employment reports show rifts in the labor market, Americans are more pessimistic about the state of the US economy.
The conference committee said Tuesday that the consumer confidence index fell to 97.4 this month from the upwardly revised 98.7 in July.
“We are pleased to announce that we are a great opportunity to help you understand the importance of our efforts,” said Stephanie Gyad, Senior Economist at Global Indicators for the Conference Committee.
“On the other hand, pessimism about the availability of future jobs has slightly faded,” he said.
Consumers are worried about their income. The measure showing short-term expectations of business conditions fell by 1.2 points to 74.8. Typically, 80 markers are indicative of an upcoming recession.
Labor markets drive recession
meanwhile Unemployment and layoffs remained historically low, and this year there has been significant degradation in the labor market. It’s increasing evidence that people find work difficult.
In July, US employers added 73,000 jobs, but 115,000 analysts didn’t expect. Worse, the Bureau of Labor Statistics’ revision to the May and June figures shaved 258,000 jobs from previous estimates, with unemployment rates reaching up to 4.1% from 4.2%.
Another government report showed that employers reduced their employment vacancies of 7.7 million in June from 7.7 million in May. The number of people leaving their jobs — signs of confidence in their outlook elsewhere — has also fallen.
More employment data will be released next week when the government releases job acquisitions for August and June job openings report.
The conference committee said that the consumer surveys used to calculate consumer confidence indexes have increased again the reference to high prices and inflation, often referred to in parallel with tariffs.
Other government data this month showed that consumer-level prices remained fairly stable from June to July, while US wholesale inflation surged unexpectedly last month.
President Donald Trump’s drastic taxes on imports are also driving consumer costs up.
The share of consumers, hoping for a recession between April and August, when Trump’s tariff rollout began, rose to its highest level in August, according to the conference committee.
The percentage of survey respondents who said they were planning to buy a car in the near future has increased, but those planning to buy a home remained stable after the July decline.
The number of consumers who say they plan to buy expensive items such as appliances has decreased, but there has been a large variation among product categories. Respondents who said they were planning to take a vacation soon either in the US or overseas also declined.
