US dipped again and remains on par with where we were during the pandemic. Concerns about the potential for tariff-induced price rises, a rapidly cooling jobs market and uncertainties over wealth are all having an influence and point to subdued consumer spending growth over the coming months.
Sentiment Resumes Its Slide
The October Conference Board measure of US consumer confidence dropped to 94.6 from an upwardly revised 95.6 print for September. The size of the dip was in line with the consensus survey.
The details show a decent pick-up in perceptions surrounding current conditions to 129.3 from 127.5, which likely reflects a combination of stronger stock markets and falling gasoline prices, but the expectations component fell from 74.4 to 71.5. This measure is the more useful indicator as it has had a decent relationship with consumer spending growth over the last few decades. It is currently consistent with annualised spending growth of about 1-1.5%. That’s not terrible, but is well short of what we have experienced since the end of the pandemic.
It’s likely that lingering anxiety about the potential for tariff-induced price hikes and a cooling of the jobs market are the main drivers of this softer outcome.
Job Perceptions Remain Weak
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Subdued Confidence Points to Cooling US Consumer Spending
