Consumer confidence declined to 97.4 in August from an upwardly revised 98.7 in July, reflecting increased pessimism about the US economy following a weak jobs report. Appraisals of current job availability fell for an eighth consecutive month, while pessimism about future job availability rose and optimism about future income faded. Short-term expectations of business conditions dropped 1.2 points to 74.8, below the 80 mark that often signals recession risk. Employers added 73,000 jobs in July, revisions cut 258,000 jobs from prior months, and unemployment ticked up to 4.2 percent. Job vacancies and quits declined, and mentions of high prices, inflation and tariffs increased. Additional jobs data for August and June openings are due next week.
Notably, consumers' appraisal of current job availability declined for the eighth consecutive month, said Stephanie Guichard, senior economist of global indicators at the Conference Board. Meanwhile, pessimism about future job availability inched up, and optimism about future income faded slightly. Consumers are worried about their income. The measure that showed short-term expectations of business conditions fell by 1.2 points to 74.8. The marker that usually signals a looming recession is 80.
While unemployment and layoffs remain historically low, there has been a noticeable deterioration in the labour market this year with mounting evidence that people are having difficulty finding jobs. US employers added 73,000 jobs in July, well short of the 115,000 analysts had expected. Worse, revisions by the Bureau of Labor Statistics to its May and June figures shaved 258,000 jobs off previous estimates, and the unemployment rate ticked up to 4.2 percent from 4.1 percent.
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