U.S. Consumers' Pessimism Spreads... 'Screaming' Amid High Oil Prices and Inflation Bomb

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U.S. consumer sentiment, suppressed by high oil prices and inflation burdens, plummeted. Even job postings showed a decline, clearly signaling a slowdown in the labor market's vitality.

Bloomberg reported on a broadcast on September 29 (local time) that the Conference Board's September Consumer Confidence Index was tallied at 81.9, a significant drop from the previous month's revised figure of 88.6. The Present Situation Index plummeted from 121.2 to 109.3. The Expectations Index, which indicates future economic outlook, also fell from 68.2 to 63.6, spreading economic pessimism. Chief International Economist Michael McKee stated, "Consumer sentiment continues to fall as news of rising gasoline prices and economic and inflation burdens continues." He added, "Gasoline prices in the Central Illinois region are as high as $4.59 per gallon," explaining the local atmosphere as "increasing complaints and suffering among residents."

Labor market indicators released on the same day also showed signs of slowing down. According to the U.S. Department of Labor's Job Openings and Labor Turnover Survey (JOLTS), job postings in August decreased to 7.079 million, down from 7.335 million in the previous month. The voluntary quit rate remained at its previous level of 1.9%. Layoffs were recorded at 1.666 million, a slight decrease from 1.702 million in the previous month. While there is no sudden employment collapse, the door for new hires appears to be narrowing.

Job search conditions, as perceived by consumers, have also become tougher. The percentage of respondents who said jobs were plentiful decreased from 24.5% to 23.6%. Conversely, the percentage who said jobs were hard to find increased from 20.3% to 21.9%. Pessimistic responses expecting a decrease in jobs in the next six months outnumbered those expecting an increase.

Anxiety about income reduction was also fully reflected in the indicators. The percentage of respondents who said their income would increase in the future decreased from 19% to 17.9%. Conversely, the percentage who expected their income to decrease increased from 13.5% to 15.4%. McKee emphasized, "A drop of this magnitude in the Conference Board survey is a relatively significant change," adding, "It clearly shows that Americans are by no means satisfied with the economic situation."

Soaring oil prices and the pressure of living costs are weighing down consumer sentiment and rapidly cooling the hiring market. With both consumer sentiment and job opening indicators declining, the official employment report from the Department of Labor, to be released later this week, has emerged as a crucial test to determine whether the U.S. economy will achieve a soft landing.

[Article Key Summary]

-The U.S. September Consumer Confidence Index plummeted to 81.9, spreading economic pessimism amid inflation and oil price burdens.

-Job openings in August decreased to 7.079 million, and the percentage of respondents perceiving job search difficulty increased to 21.9%.

-With 15.4% of consumers concerned about income reduction, attention is focused on the employment report later in the week.

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