The numbers: A survey of consumer confidence fell to a four-month low of 103.0 in September, reflecting angst about rising interest rates, still-high inflation and a stalemate over the federal budget in Washington.
The closely followed index dropped 5.7 points from a revised 108.7 in August, the Conference Board said Tuesday.
Higher gasoline prices are weighing on the minds of consumers while the threat of a government shutdown looms in Washington. Rising interest rates orchestrated by the Federal Reserve to tame inflation are also taking a bite out of the economy.
Consumer confidence tends to signal whether the economy is getting better or worse. Economists polled by The Wall Street Journal had forecast the index to register 105.5.
Key details: A measure that looks at how consumers feel about the economy right edged up to 147.1 from 146.7 in the prior month. It’s also near a four-month low, however.
A confidence gauge that looks ahead six months slipped to 73.7 from 83.3. The future-expectations index is now well above the 80 mark that often signals a recession ahead.
Big picture: The confidence index and other surveys of consumer attitudes show increasing anxiety about the economy. Higher interest rates have made it harder to buy a home or car and Americans get sticker shock every time they fill up their gas tanks or go to buy food.
The jobs market is still in great condition and economy has continued to grow, however, suggesting the odds the U.S. might avoid a recession are higher now than they have been in quite some time.
Looking ahead: “Consumers continued to be preoccupied with rising prices in general, and for groceries and gasoline in particular,” said Dana Peterson, chief economist at the board. “Consumers also expressed concerns about the political situation and higher interest rates.”
Market reaction: The Dow Jones Industrial Average
DJIA,
and the S&P 500
SPX,
declined in Tuesday trades. Rising interest rates have robbed stocks of their recent momentum.
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