Consumer confidence falls to five-month low on job concerns

US consumer confidence fell in September to a five-month low on growing concerns about job prospects and the broader economy.

The Conference Board's gauge of confidence decreased 3.6 points to 94.2, data released Tuesday showed. The median estimate in a Bloomberg survey of economists called for a reading of 96.

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A gauge of present conditions fell 7 points to the lowest level in a year, while a measure of expectations for the next six months also dropped in September.

The measure of confidence has been largely drifting sideways for the past several months as consumers contend with various cross-currents including a hiring slowdown, stubborn inflation and record stock prices.

Despite subdued sentiment compared with earlier this year, consumer spending has proved resilient and is keeping the economy motoring ahead. Earlier this month, the Federal Reserve cut interest rates for the first time this year in an effort to guard against a deterioration in what Chair Jerome Powell said is a "low-hire, low-fire" labor market. 

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The Conference Board's report showed the share of consumers saying jobs were plentiful declined to the lowest level since February 2021. The share that said jobs were hard to get was unchanged.

The difference between these two — a metric closely followed by economists to gauge the job market — narrowed to the smallest since early 2021.

"Consumers' assessment of business conditions was much less positive than in recent months, while their appraisal of current job availability fell for the ninth straight month to reach a new multiyear low," Stephanie Guichard, senior economist at the Conference Board, said in a statement.

A separate report Tuesday showed job openings in August were little changed from a month earlier while the number of people who quit their jobs declined to the lowest level since November.

While Fed officials lowered rates this month, Powell has said the central bank must remain attentive to the possibility that higher import duties risk leading to persistent inflation.

"References to tariffs declined this month, but remained elevated and continued to be associated with concerns about higher prices," Guichard said.

Inflation has restrained consumer confidence this year. The share of consumers expecting higher prices in the next 12 months eased from a month earlier.

Consumer spending has been solid in recent months. The Conference Board report showed buying plans for major appliances were little changed, while vacation plans eased. 

Homebuying plans, however, picked up as mortgage rates have started to fall. The share of consumers expecting a decline in interest rates rose to the highest level since the start of the year.