WASHINGTON (AP) \u2014 The confidence of American consumers slipped this month, particularly about the future, as expectations persist that interest rates will remain elevated for an extended period.<\/p>\n\n\n\n
The Conference Board, a business research group, said Tuesday that its consumer confidence index fell to 103 in September from 108.7 in August. Analysts were expecting a smaller decrease, to a reading of 105.<\/p>\n\n\n\n
The index measures both Americans\u2019 assessment of current economic conditions and their outlook for the next six months.<\/p>\n\n\n\n
Most troubling was the decline in the index measuring future expectations, which tumbled to 73.7 in September from 83.3 in August. Readings below 80 for future expectations historically signal a recession within a year.<\/p>\n\n\n\n
Relatedly, consumers\u2019 perceived likelihood of a recession in the next year rose, after it declined over the summer.<\/p>\n\n\n\n
<\/a>\u201cConsumers may be hearing more bad news about corporate earnings, while job openings are narrowing, and interest rates continue to rise \u2014 making big-ticket items more expensive,\u201d said Dana Peterson, chief economist at The Conference Board.<\/p>\n\n\n\n The downturn in spending is beginning to reveal itself in the quarterly financial reports of some of the nation\u2019s biggest retailers. Target recently reported its first quarterly sales decline<\/u><\/a> in six years. Home Depot, the nation\u2019s largest home improvement retailer, also reported a decline in sales<\/u><\/a>, with a fall-off in big-ticket items like appliances and other things that often require financing.<\/p>\n\n\n\n Best Buy\u2019s sales and profits slid in the second quarter<\/u><\/a> as the nation\u2019s largest consumer electronics chain continues to wrestle with a pullback in spending on gadgets after Americans splurged during the pandemic.<\/p>\n\n\n\n Consumer spending accounts for around 70% of U.S. economic activity, so economists pay close attention to the mood of consumers to gauge how it may affect the broader economy.<\/p>\n\n\n\n Confidence improved late in the spring as inflation eased in the face of 11 interest-rate hikes by the Federal Reserve. But the recent downturn reflects consumer anxiety over spending on non-essential goods, particularly if they have to put it on a credit card with an elevated interest rate.<\/p>\n\n\n\n The U.S. economy \u2014 the world\u2019s largest \u2014 has proved surprisingly resilient in the face of sharply higher borrowing costs.<\/p>\n\n\n\n