September Shock: U.S. Consumer Confidence Plummets to 3-Year Low, Sending New York Stock Exchange into a Tailspin

[뉴욕=뉴스핌] Correspondent Kim Min-jeong = The consumer confidence index, which indicates Americans’ assessment of the economy and finances, has shown the largest decline in three years this month. Major indices in the U.S. stock market have turned downward across the board on the news that consumer sentiment has weakened more than expected.

The Conference Board (CB) announced on the 24th (local time) that the consumer confidence index for September fell to 98.7 from 105.6 in August. This is the largest one-month decline since August 2021. Financial market experts had previously predicted that the figure would be 103.9.

Looking at the sub-items, the current conditions index, which reflects consumers’ evaluation of the current economic and employment market conditions, plunged 10.3 points from the previous month to 124.3, while the expectations index, which reflects consumers’ short-term outlook on income, economic and employment conditions, fell 4.6 points to 81.7. When this index falls below 80, it signals an economic recession.

Trends in the U.S. Consumer Confidence Index.[차트=콘퍼런스보드(CB)] 2024.09.24 mj72284@newspim.com

The decline in consumer confidence was steepest among those aged 35 to 54. Pessimism increased most among those earning less than $50,000 a year. Confidence was highest among respondents earning more than $100,000 a year.

“Consumers’ assessment of the current economy has become more negative, and their assessment of current labor market conditions has also weakened,” said Dana Peterson, chief economist at CB. “Consumers are also more pessimistic about future labor market conditions and less positive about future economic and income prospects.”

The share of consumers who expect interest rates to rise over the next 12 months continued its downward trend for four months, reaching 46.5%, the lowest level since February 2024. In contrast, the share of consumers who expect interest rates to fall was 33.3%, the highest since April 2020.

However, inflation expectations for the 12 months to September rose to 5.2%, but were well below the previous record of 7.9% recorded in March 2022.

The results of the survey were released less than a week after the Federal Reserve (Fed) made a ‘big cut’ of 0.50% point (%P) in interest rates. The financial market is reflecting the possibility that the Fed will make another big cut at the regular Federal Open Market Committee (FOMC) meeting on November 7th at 58.1%. The probability of a 0.25%P interest rate cut is 41.9%.

The three major indices of the New York Stock Exchange, which had been showing a gradual upward trend on the positive news of China’s interest rate cut, all turned to a downward trend after the release of the consumer confidence index. At 10:39 a.m. Eastern time in the United States, the Dow Jones Industrial Average fell 0.01%, while the S&P 500 Index and the Nasdaq Index fell 0.32% and 0.53%, respectively.

mj72284@newspim.com