September consumer confidence misses forecast at 81.9

• The prior month's reading was 89.4.

The Conference Board's Consumer Confidence Index, a key monthly gauge of household sentiment in the US, places more emphasis on employment than the University of Michigan's alternative. It asks five questions: assessments of current business conditions and employment (forming the Present Situation Index), along with expectations for business, jobs, and income six months ahead (the Expectations Index). The headline figure is indexed to 1985=100. Toluna has collected the survey online since 2021, with a preliminary cut-off around mid-month and release at 10 am ET on the final Tuesday.

Two subcomponents are more significant than the headline. The first is the labour differential—the percentage of respondents saying jobs are "plentiful" minus those saying they are "hard to get." This closely tracks the unemployment rate and is widely used by economists as a real-time labour market indicator. The second is the Expectations Index. The Conference Board has historically considered a reading below 80 as a recession warning.

That is where the issue lies. In August, the headline fell 0.8 points to 89.4, the second consecutive decline, and fell short of the 90.3 consensus. The divergence was sharp: the Present Situation Index rose 6.8 points to 121.2, while the Expectations Index plunged 5.8 points to 68.2—deep into warning territory. Consumers became more optimistic about current labour market conditions but more pessimistic about future jobs, income, and business conditions, with the Iran-linked energy shock and $4 gasoline still exerting pressure.

A caveat: sentiment has been a poor predictor of spending in recent years. September's reading arrives this morning, with the consensus forecast at 90.0.