In a significant shift in consumer sentiment, the Conference Board reported a notable decline in the consumer confidence index for September, which dropped to 98.7 from 105.6 in August. This marks the steepest one-month decline observed since August 2021, indicating growing concerns among consumers regarding job security and inflation.

The latest figures reveal that the index fell short of the Dow Jones consensus forecast of 104, highlighting a stark contrast to the pre-pandemic confidence level of 132.6 recorded in February 2020. This downturn reflects a broader unease about the economic landscape as consumers grapple with various challenges.

All five components measured by the Conference Board experienced declines, with the most significant drop occurring among respondents aged 35-54 who earn less than $50,000. Dana Peterson, Chief Economist at the Conference Board, noted that consumers’ assessments of current business conditions have turned negative, and there is a growing pessimism regarding future labor market conditions, business prospects, and income growth.

The last time consumer confidence saw such a drastic decline was during the early stages of inflation’s rise, which ultimately reached levels not seen in over 40 years. Following the release of this data, stock markets experienced brief losses, while Treasury yields saw a downward trend.

In addition to the overall drop in the confidence index, the present situation measure decreased by 10.3 points to 124.3, and the expectations index fell by 4.6 points to 81.7. Notably, a reading below 80 in the expectations measure is often associated with recessionary conditions.

Consumers expressed heightened concerns primarily regarding job availability and inflation. The percentage of respondents indicating that jobs are plentiful decreased to 30.9%, down from 32.7% in August. Concurrently, the proportion of those finding jobs