Consumer Confidence Index fell in August<\/a>. Americans are getting less optimistic about\u00a0their future income, and they aren’t sanguine about business and labor-market conditions going forward. In fact, both of those metrics in the Conference Board survey are sitting below the threshold that typically signals a recession is coming. <\/p>\nThat lines up with the University of Michigan’s index of consumer sentiment, which deteriorated this month \u2014\u00a0from a level that was already pretty mediocre. Worries about tariffs and inflation, and both of them eroding personal finances, drove the downturn. And yet, consumers won’t necessarily be pulling back on spending and hunkering down at home in a miasma of gloom and doom.<\/p>\n
For a while now, Americans have been getting more worried about their ability to keep a job and earn a paycheck. Stephanie Guichard at The Conference Board said every month since the beginning of the year, \u201cWe see a decline in the share saying that jobs are plentiful, an increase in the share saying that jobs are hard to get.\u201d<\/p>\n
Consumers are also worried that tariffs will drive up prices and squeeze household finances. They say they plan to spend less going forward.<\/p>\n
\u201cFor big-ticket items, but also for services, like going on vacation, going to restaurants,\u201d said Guichard.<\/p>\n
Except, these plans to be more frugal? Guichard said we\u2019ve heard them before.<\/p>\n
\u201cI mean like a year ago, they were telling us they were going to be cautious, and at the end of the day they were not,\u201d she said.<\/p>\n
Instead consumers kept spending it up. <\/p>\n
\u201cAnd the main reason is, as long as U.S. consumers have a job and have income, they tend to spend it,\u201d said Guichard.<\/p>\n
But here\u2019s the thing: It really matters which consumers we\u2019re talking about, said John Leer at polling firm Morning Consult. <\/p>\n
\u201cConsumer sentiment across the income groups is as wide as it has ever been. High-income folks have roughly returned back to where they were prior to the start of the pandemic, which is really remarkable,\u201d said Leer. \u201cLow-income folks, on the other hand, are basically back to where they were at the depths following the initial onset of the pandemic.<\/p>\n
It partly comes back to those increasing worries about the labor market. They\u2019re concentrated among lower- and middle-income consumers, whose jobs are most vulnerable to a downturn. These consumers are pretty much treading water \u2014 spending most-everything they earn every month on what they need. But they\u2019re not the ones who keep pushing consumer spending higher.<\/p>\n
\u201cWe know that spending growth is almost entirely being driven by high-income folks,\u201d said Leer.<\/p>\n
Who have evermore spending power \u2014 from rising incomes, and rising wealth from stocks and homeownership.<\/p>\n
Related Topics<\/p>\n","protected":false},"excerpt":{"rendered":"Consumers, as we say all the time on this program, drive this economy. Their spending accounts for around…\n","protected":false},"author":2,"featured_media":115571,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,75087,3228,101,3425,759],"class_list":["post-115570","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-consumer-confidence-index","tag-consumers","tag-economy","tag-income","tag-tariffs"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/115570","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=115570"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/115570\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/115571"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=115570"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=115570"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=115570"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}