Economic Outlook Worsens – Even Among Republicans

A trio of economic reports issued Tuesday showed the economy continues to chug along, though consumers remain pessimistic about labor market and general business conditions over the next six months.

The Conference Board’s consumer confidence index fell by 6.7 points to 81.9 (1985=100). The present situation Index – based on consumers’ assessment of current business and labor market conditions – retreated by 7.9 points to 109.3. The expectations index – a measure of how Americans view the short-term outlook for income, business and labor market conditions – fell by 5.9 points to 63.6, its third consecutive monthly decline. The survey period for this month’s preliminary results included a federal funds rate hike from the Federal Reserve and continued geopolitical tensions.

“The Consumer Confidence Index deteriorated notably in September, following two prior months of softening,” wrote Dana M. Peterson, chief economist at the business organization. “The present situation Index fell sharply, while the expectations index slipped further into negative territory. Consumer appraisals of current business conditions became negative for the first time since September 2024.”

“Perceptions of the current labor market also worsened, though remained within positive territory,” Peterson added. “Over the next six months, consumers expected both business conditions and the labor market to weaken. Consumers still anticipated their household incomes to rise, but less so compared to previous months.”

“By generation, confidence for Gen Z, followed by Millennials, remained the highest on a six-month moving average basis,” Peterson wrote. “Confidence among the three oldest generations – Generation X, Baby Boomers, and the Silent Generation – continued to weaken. Confidence fell in September across all political affiliations – Democrats, Republicans, and Independents.”

Meanwhile, the Bureau of Labor Statistics said that job openings remained relatively unchanged at 7.1 million in August, down from the upwardly revised 7.3 million in July.

“In August, the job openings rate decreased for establishments with 1 to 9 employees, while the hires, quits, layoffs and discharges, and total separations rates showed little or no change,” the BLS said. “Establishments with 5,000 or more employees showed little or no change in job openings, hires, and separations rates.

In a separate report, home prices continued to increase in July, with the national S&P Cotality Case-Shiller Index posting a 1.9% annual increase – up from 1.6% a month earlier.

“For the fifth consecutive month, Chicago led all metros with a 6.9% annual gain in July, followed by New York (5.8%) and Cleveland (4.2%),” said Rebecca Kaufman, associate director of commodities at S&P Dow Jones Indices.

“Meanwhile, Seattle posted the largest annual decline for the second consecutive month, falling 1.6%, followed by Las Vegas (-1.3%) and Denver (-1.1%),” Kaufman added. “The years-long East-West divide persists, with six out of the eight Eastern metropolitan markets recording greater year-over-year changes in July versus June, compared with just two of the eight Western metropolitan markets.”

Source: U.S News