Consumer Confidence Tanks Ahead of Potentially Strong Holiday Season
Growing economic concerns are finally catching up with consumers. According to The Conference Board's Consumer Confidence Index, consumer confidence took a dip in September to 125.1, down from 134.2 in August. The Present Situation Index, an assessment of current business and labor market conditions, also decreased from 176.0 to 169.0, and the Expectations Index, an assessment of consumer's short-term outlook for income, business and labor market conditions, decreased from 106.4 to 95.8 in September. Lynn Franco, Senior Director of Economic Indicators at The Conference Board, states that "The escalation in trade and tariff tensions in late August appears to have rattled consumers. However, this pattern of uncertainty and volatility has persisted for much of the year and it appears confidence is plateauing. While confidence could continue hovering around current levels for months to come, at some point this continued uncertainty will begin to diminish consumer's confidence in the expansion." There is an argument that consumers are supporting the economy and driving GDP growth. If confidence is beginning to wane, in spite of strong expectations for the holiday season, consumers could start holding on to their wallets. This could prove tricky as inventory levels rise ahead of tariff increases and consumers shop for deals they know they can get. Fingers crossed that the positive holiday expectations materialize and shoppers come out for both online and brick-and-mortar.