By Xavier Fontdegloria

 

Confidence among U.S. consumers fell in September for the third consecutive month, signaling that the spread of Covid-19 and inflation fears continue to weigh on households' mood.

The consumer confidence index fell to 109.3 in September from a revised 115.2 in August, according to data released Tuesday from The Conference Board.

Economists polled by The Wall Street Journal expected confidence to come in at 114.9.

"Consumer confidence dropped in September as the spread of the Delta variant continued to dampen optimism," said Lynn Franco, senior director of economic indicators at The Conference Board.

Consumer confidence hints Americans' willingness to spend on goods and services, which is a major driver of the U.S. economy.

In September, concerns about the state of the economy and short-term growth prospects deepened, while spending intentions for homes, autos, and major appliances all retreated again, Ms. Franco said. Short-term inflation concerns eased somewhat but remain elevated, she said.

The present situation index, which reflects consumers assessment of current business and labor market conditions, fell to 143.4 in September from 148.9 in August. The expectations index, which gauges short-term outlook for income, business and labor market conditions, decreased to 86.6 from 92.8 the previous month.

"Consumers have grown more cautious and are likely to curtail spending going forward," she said.

Consumer sentiment indicators tend to be sometimes inaccurate gauges of actual spending patterns, Citi's economist Veronica Clark said in a note. August's sharp decline in U.S. consumer confidence, for example, didn't prompt a fall in retail sales during the month.

"With virus cases showing early signs of stabilization, and some pullback in transitory prices like used cars, consumer confidence measures could rise again in coming months," she said.

Another consumer sentiment survey carried out by the University of Michigan showed that Americans' sentiment stabilized in September at subdued levels. The University of Michigan survey is more focused on consumers' attitudes toward buying conditions, while the Conference Board survey focuses more on labor market conditions.

 

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

 

(END) Dow Jones Newswires

September 28, 2021 10:33 ET (14:33 GMT)

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