Reuters File Photo: Shipping containers seen at the port of Bayonne, New Jersey, USA, August 21, 2021. Reuters / Andrew Kelly
By Lucia Mutikani
WASHINGTON (Reuters) – American consumer confidence fell to a seven-month low in September as the steady rise in Kovid-1 cases deepened concerns about the near-term prospects for the economy, in line with expectations of slower growth in the third quarter.
According to a conference board survey on Tuesday, consumers are less interested in buying a home and large ticket materials such as motor vehicles and large household appliances in the next six months. Consumers were not as enthusiastic about their views on the labor market as they had been in the previous month.
Economic activity has cooled in recent months as the emergence of epidemic relief funds driven by highly contagious variants of coronavirus has faded and the infection has spread.
Robert Frick, a corporate economist at the Navy Federal Credit Union in Vienna, Virginia, said, “But that wave seems to be christening. Hope has only hit his nose.” “If the delta’s exclusion prediction comes true, the push for a recovery rally could be a three-month truce.”
The Consumer Confidence Index fell to 109.3 this month from 115.2 in August, the conference board said. The third consecutive monthly decline has pushed the index to its lowest level since February.
The measure, which puts more emphasis on the labor market, fell 19.6 points from a high of 128.9 in June. Economists in a Reuters poll predicted the index would rise to 114.5.
Lynn Franco, senior director of economic indicators at the Conference Board in Washington, said: “These recent declines suggest that consumers have become more cautious and will likely cut costs.”
Consumer inflation expectations for the next 12 months fell to 6.5% from 6.7% last month. The Federal Reserve last week measured its core inflation estimate at 3.7% this year. Which was up from the 3.0% median expected by the US Federal Reserve in June. The US Federal Reserve has set a flexible 2% inflation target.
The so-called Labor Market Differential of the Conference Board, derived from data from respondents on whether jobs are plentiful or difficult, fell to 42.5 this month from 44.4 in August.
This measure is closely related to the unemployment rate in the Labor Department’s closely watched employment report. The September employment report is due to be released next Friday.
Wall Street stocks have been less traded. The dollar has risen against the basket of coins. US Treasury prices have fallen.
Consumer Confidence: https://graphics.reuters.com/USA-STOCKS/klpykglanpg/consconf.png
House Price Surge
Very few families this month wanted to buy long-lasting products such as motor vehicles and household appliances such as washing machines and clothes dryers. This supports the expectation of a sharp decline in consumer spending this quarter, which will ultimately hamper economic growth.
GDP growth estimates for the third quarter are mostly below the 5% annual rate. The economy grew 6.6% in the second quarter.
A separate report from the Commerce Department on Tuesday reinforced expectations of GDP growth, with the trade deficit widening 0.9% to 87 87.6 billion in August as businesses imported more goods to replenish goods. Trade has subtracted from GDP growth for four quarters.
Trade balance: https://graphics.reuters.com/USA-STOCKS/lgvdwkgdlpo/tradebal.png
Commodity imports rose 0.8% to 6 236.6 billion, driven by consumer goods and industrial supplies. But imports of food, capital goods and motor vehicles declined. Motor vehicle imports may be lower due to the global semiconductor deficit, which is affecting production.
Growing imports increased exports by 0.7% to 9 149.0 billion, supported by industrial supplies and consumer goods. But the country has seen a decline in exports of capital goods, motor vehicles and food products. Exports are rising as the global economy continues to recover from the epidemic.
The increase in imports has ended up in the warehouses of some wholesalers and retailers. The wholesale inventory accelerated 1.2% last month after gaining 0.6% in July. Retailer stocks rose 0.1% after rising 0.4% in July. Retail inventories were stuck due to a 1.5% breakdown in motor vehicle stocks. The drop, after a 0.2% gain in July, reflects a deficit related to the microchip deficit.
Wholesale List: https://graphics.reuters.com/USA-STOCKS/lbvgngykgpq/wsinv.png
Excluding auto, retail inventory, which accounts for GDP, rose 0.6% from 0.5% in the previous month. The business listing declined sharply in the first half of the year. The GDP growth rate should slow down as the trade deficit on commodities increases as a result of last month’s growth.
Housing market news was discouraging, with a conference board survey showing less enthusiasm among consumers to buy a home in the next six months amid house prices, pushing home ownership out of the reach of many.
The third report on Tuesday found that the S&P CoreLogic Case-Shiller National Home Price Index rose a record 19.7% in July compared to a year earlier after accelerating 18.7% in June.
The fourth report from the Federal Housing Finance Agency (FHFA) confirmed permanent home inflation, showing that house prices rose a record 19.2% in the 12 months to July. It jumped 18.9% in June.