The trade war keeps weighing on American consumers. That’s a risk for the US economy, which is driven by consumer spending.
The Conference Board’s consumer sentiment index for September fell to 125.1, far lower than economists’ consensus forecast of 133.5, according to a survey conducted by Refinitiv.
“The escalation in trade and tariff tensions in late August appears to have rattled consumers,” said Lynn Franco, senior director of economic indicators at The Conference Board.
The data also “suggests that the recent bout of equity market weakness may have generated a sense of nervousness about the economy,” said James Knightley, chief international economist at ING in a note to clients. The recent jump in gasoline prices on the back of turmoil in the oil market might have been a factor as well.
Amid a continued pattern of uncertainty and volatility “it appears confidence is plateauing” Franco said.
Consumers account for some two-thirds of the American economy. But if their confidence is waning, the engine of America’s growth could be at risk.
The Conference Board’s measures for the present situation and expectations also dropped, as consumers see the job market as less than favorable.
It’s not the first measure of American sentiment to have been hurt by the trade war.
In late August, the University of Michigan’s consumer sentiment survey showed its largest monthly drop since December 2012 in the face of the the ongoing trade uncertainties.
Consumer confidence has held up pretty well given how long the trade war has been going on. But perhaps a breaking point has been reached.