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The Conference Board’s consumer confidence index registered a 94.2 reading, off 3.6 points from the August reading and below the Dow Jones estimate for 96.0.
The Bureau of Labor Statistics said job openings totaled 7.23 million, up 19,000 from July though down 422,000 from a year ago.
Consumer confidence edged lower in September ahead of an expected data blackout caused by the looming federal government shutdown, the Conference Board reported Tuesday.
The board’s headline confidence index registered a 94.2 reading, off 3.6 points from the August reading and below the Dow Jones estimate for 96.0. The reading was the lowest since April and comes with nonessential government operations slated to close at midnight.
In addition to the weakness on the main reading, the “present situation” index hit its lowest in a year.
“Consumers’ assessment of business conditions was much less positive than in recent months, while their appraisal of current job availability fell for the ninth straight month to reach a new multiyear low,” said Stephanie Guichard, the organization’s senior economist for global indicators.
Though the labor market has shown considerable weakness this year, employment availability in August was slightly better than the prior month.
The Bureau of Labor Statistics, in what could be its last data release until the spending impasse on Capitol Hill is resolved, said job openings totaled 7.23 million, up 19,000 from July though down 422,000, or 5.5%, from the same period a year ago.
The bureau’s Job Openings and Labor Turnover report, which Federal Reserve officials watch closely to gauge labor market slack, showed a slower pace in both hiring and total separations. Quits fell by 75,000 for a category looked at as a gauge of worker confidence for finding new jobs after leaving their present one.
Labor market stability is an important consideration for the Fed as officials contemplate the next move for interest rates. Markets widely expect the central bank to lower its benchmark borrowing rate by half a percentage point by the end of the year, with cuts at the October and December meetings.
“My baseline outlook doesn’t see the labor market softening much further – but there are risks,” Boston Fed President Susan Collins said Tuesday. “In particular, I see some increased risk that labor demand may fall significantly short of supply, leading to a more meaningful and unwelcome increase in the unemployment rate.”
Should the spending impasse be resolved by Friday, the BLS is expected to show payroll growth of 51,000 in September, following just 22,000 in August.
The Conference Board’s report showed a growing divide in labor market perceptions.
The share of respondents indicating that jobs were “plentiful” slipped to 26.9%, down more than 3 percentage points from August, while the “hard to get” gauge held flat at 19.1%.
Also, the survey showed more pessimism about finances, as views on their current financial situation saw its biggest one-month drop since the question was asked in July 2022. More
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Susan Collins, president of the Federal Reserve Bank of Boston, speaks during the National Association of Business Economics (NABE) economic policy conference in Washington, DC, US, on Thursday, March 30, 2023.
Ting Shen | Bloomberg | Getty Images
Boston Federal Reserve President Susan Collins on Tuesday expressed support for the recent interest rate cut, but showed some skepticism on the extent of future moves as she sees continued threats from inflation.
Speaking in New York, the central bank policymaker noted risks to both higher inflation and a softening labor market that are keeping officials on their toes.
“In my view, a bit of easing was appropriate to address the recent shift in the balance of risks to our inflation and employment mandate,” Collins said in prepared remarks. “But I continue to see a modestly restrictive policy stance as appropriate, as monetary policymakers work to restore price stability while limiting the risks of further labor market weakening.”
The “modestly restrictive” phrasing has been used by officials to describe the current stance of policy as holding back growth — and inflation — while taking heed of easing payroll gains and a gradual increase in the unemployment rate.
A voter this year on the rate-setting Federal Open Market Committee, Collins noted a “highly uncertain environment” that would see “higher and more persistent inflation, more adverse labor market developments – or both.”
“Still, with less scope for inflationary pressures from the labor market, the upside inflation risks I was concerned about a few months ago are more limited,” she added. “In this context, it may be appropriate to ease the policy rate a bit further this year – but the data will have to show that.”
At the September meeting, Collins and her fellow officials narrowly indicated the probability of two more rate reductions this year, and that has been reflected in market pricing.
Policymakers face challenges ahead with the looming government shutdown. The Labor Department has indicated it will cease data collection and releases on jobs while the impasse continues, as the pivotal nonfarm payrolls report looms Friday.
Earlier in the day, Fed Governor Philip Jefferson also noted that he supported the FOMC’s decision earlier in September to lower its benchmark borrowing rate by a quarter percentage point. Jefferson, a permanent FOMC voter, did not provide guidance on where he expects policy to go.
“Considering the outlook I described, I see the risks to employment as tilted to the downside and risks to inflation to the upside. It follows that both sides of our mandate are under pressure,” he said.
Market pricing indicates a near-certainty that the FOMC will approve another cut at its October meeting. More
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