US consumer confidence hits seven-month low
September 28 2021 10:01 PM
RELATED STORIES
Shoppers are seen outside a Walmart store in Rosemead, California (file). US consumer confidence fel
Shoppers are seen outside a Walmart store in Rosemead, California (file). US consumer confidence fell to a seven-month low in September as a relentless rise in Covid-19 cases deepened concerns about the economy’s near-term prospects, fitting in with expectations for a slowdown in growth in the third quarter.

Reuters / Washington

US consumer confidence fell to a seven-month low in September as a relentless rise in Covid-19 cases deepened concerns about the economy’s near-term prospects, fitting in with expectations for a slowdown in growth in the third quarter.
The survey from the Conference Board on Tuesday showed consumers less interested in buying a home and big-ticket items such as motor vehicles and major household appliances over the next six months.
Consumers were also not as upbeat in their views of the labour market as in the prior month.
Economic activity has cooled in recent months as the boost from pandemic relief money faded and infections flared up, driven by the highly contagious variant of the coronavirus.
“But given that wave seems to be cresting, there’s hope confidence just hit its nadir,” said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia. “Assuming predictions of Delta dropping hold true, this setback may be a three-month trough during the recovery rally.”
The Conference Board said its consumer confidence index dropped to a reading of 109.3 this month from 115.2 in August.
The third straight monthly decline pushed the index to the lowest level since February.
The measure, which places more emphasis on the labour market, has dropped 19.6 points from a peak of 128.9 in June.
Economists polled by Reuters had forecast the index nudging up to 114.5.
“These back-to-back declines suggest consumers have grown more cautious and are likely to curtail spending going forward,” said Lynn Franco, senior director of economic indicators at the Conference Board in Washington.
Consumers’ inflation expectations over the next 12 months slipped to 6.5% from 6.7% last month.
The Federal Reserve last week projected its key inflation measure at 3.7% this year.
That was up from the 3.0% median the US central bank projected back in June.
The US central bank has a flexible 2% inflation target.
The Conference Board’s so-called labour market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, fell to a reading of 42.5 this month from 44.4 in August.
This measure closely correlates to the unemployment rate in the Labor Department’s closely watched employment report.
September’s employment report is due to be released next Friday.
Stocks on Wall Street were trading lower.
The dollar rose against a basket of currencies.
US Treasury prices fell.
Fewer households intended to buy long-lasting manufactured goods such as motor vehicles and household appliances like washing machines and clothes dryers this month.
That supports expectations for a sharp slowdown in consumer spending this quarter, which will ultimately restrain economic growth.
Gross domestic product growth estimates for the third quarter are mostly below a 5% annualised rate.
The economy grew at a 6.6% pace in the second quarter.
Expectations for slower GDP growth were reinforced by a separate report from the Commerce Department on Tuesday showing the goods trade deficit rose 0.9% to $87.6bn in August as businesses imported more products to replenish inventories.
Trade has subtracted from GDP growth for four straight quarters.
Imports of goods climbed 0.8% to $236.6bn, lifted by consumer goods and industrial supplies.
But imports of food, capital goods and motor vehicles fell.
Motor vehicle imports were likely weighed down by a global shortage of semiconductors, which is impacting production.
Rising imports offset a 0.7% gain in goods exports to $149.0bn, supported by industrial supplies and consumer goods.
But the nation reported a decline in exports of capital goods, motor vehicles and food products.
Exports are increasing as global economies continue to recover from the pandemic. Some of the increase in imports ended up in warehouses at wholesalers and retailers.
Wholesale inventories accelerated 1.2% last month after gaining 0.6% in July.
Stocks at retailers edged up 0.1% after increasing 0.4% in July.
Retail inventories were held back by a 1.5% tumble in stocks of motor vehicle. The drop, which followed a 0.2% gain in July, reflected shortages related to the scarcity of microchips.



There are no comments.

LEAVE A COMMENT Your email address will not be published. Required fields are marked*
MORE NEWS

HAPPENING IN DOHAMore