Confidence dips on bad news flurry despite jobs plentiful at record high
Summary
Consumer confidence dropped to a seven-month low in September as the Delta variant brought a spike in COVID cases. With no shortage of other factors to blame, such as wildfires, war, hurricanes and a border crisis, we see room for improvement in coming months. One silver lining: the share of consumers seeing jobs as plentiful rose to the highest level on record.
Present Situation, Expectations and Confidence All Decline
Consumer confidence fell to 109.3 from 115.2; that puts confidence at a seven-month low as COVID cases continued to pile up during September.
A strong labor market might be the only thing giving consumers much cheer these days amid an onslaught of negative news. Notably, despite the declines in overall confidence, expectations and the present situation indices, the share of consumers saying that jobs are plentiful rose to its highest level on record. In figures going back to the 1960s, there has never been a greater consensus among consumers that jobs are plentiful at the moment.
Even though one-off factors such as natural disasters do not tend to influence confidence for a prolonged period, non-employment factors that might be weighing on consumer's minds are just about everywhere you look.
The month began amid the ugly wind-down of the war in Afghanistan, historic wildfires are raging in the West as Hurricane Ida and related flooding swamp communities across the East. (Ida made landfall on August 29th, too late to be fully captured in last month's confidence survey).
The looming limit on the debt ceiling and related congressional bickering may not be a top of mind concern for the average consumer, but it does not likely lift spirits either.
Source: The Conference Board and Wells Fargo Securities
Author
Wells Fargo Research Team
Wells Fargo
