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US consumer confidence saw its biggest drop since 2021 as worries about a slowing labor market and stubbornly high costs of living continue to worry Americans.
The Conference Board’s index decreased by 6.9 points Tuesday, falling to a level well below economists’ estimates.
“The deterioration across the Index’s main components likely 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,” said the Conference Board’s chief economist.
The report mirrors concerns about a lackluster job market that prompted the US Federal Reserve last week to lower interest rates 0.5 percentage points, a more drastic cut than expected, Bloomberg reported.
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The fall in consumer confidence marks the biggest drop since August 2021, when inflation began to soar and ultimately reached its highest level in more than 40 years, according to CNBC.
The share of consumers that said jobs were plentiful also declined for a seventh consecutive month, marking the longest streak of declines since the 2008 recession.
Consumers still said they believe there is a low chance of recession within the next year, but there was a “slight uptick” in the number of people who believe the economy is already in a downturn, the Conference Board said.