America’s slowing job market is taking a toll on people’s moods.
The Conference Board’s latest consumer survey showed that Americans became much more pessimistic about the US economy’s current health and the future of the job market.
The monthly survey’s Consumer Confidence Index fell to a reading of 98.7 in September, down from August’s upwardly revised 105.6. That decline was worse than economists had predicted.
“Consumer confidence dropped in September to near the bottom of the narrow range that has prevailed over the past two years,” said Dana Peterson, chief economist at The Conference Board, in a release. “September’s decline was the largest since August 2021 and all five components of the Index deteriorated.”
The US job market is in decent shape, but it is clearly running at a much slower pace these days than it has in recent years. In July, employers had the fewest job openings since January 2021 and the unemployment rate stood at 4.2% in August, up from a half-century low of 3.4% last seen in 2023. Employers just aren’t hiring at the same break-neck pace they did when the US economy first rebounded mightily from the Covid-19 pandemic.
Americans have taken note. Peterson said the weaker-than-expected survey results “reflected consumers’ concerns about the labor market and reactions to fewer hours, slower payroll increases, fewer job openings — even if the labor market remains quite healthy, with low unemployment, few layoffs and elevated wages.”
The job market’s fate is unclear. It could continue to weaken, possibly drifting into recession territory, or it could hold steady and even accelerate. The Federal Reserve last week delivered a supersized interest rate cut, paring back rates from a 23-year high that lasted for more than a year. The central bank’s top leader, Jerome Powell, said in a news conference that aggressive action reflects the Fed’s commitment to preserving the job market’s health.
There might be some light at the end of the tunnel, too. Employers might be holding back on hiring for two good reasons: Uncertainty over the upcoming US presidential election and the fate of interest rates, CNN previously reported. That means hiring could pick up once the country knows whether Vice President Kamala Harris or former President Donald Trump will become the next president and if the Fed continues to lower interest rates, easing pressure off businesses of all sizes.