US Labor market concerns stand out in Sep confidence survey-110456179

North America Economic Research24 September 2024J P M O R G A Nwww.jpmorganmarkets.comEconomic and Policy ResearchAbiel Reinhart(1-212) 270 4058abiel.reinhart@jpmchase.comJPMorgan Chase Bank NA•The consumer confidence index dropped from 105.6 in August to 98.7 in September, driven by declines in both the present situation and expectations index•The labor market differential fell from 15.9% to 12.6%, which suggests another rise in the unemployment rate in September•Home-buying plans rose to their highest level in just over a year, indicating that buyers could be responding to lower mortgage ratesThe Conference Board consumer confidence index fell from 105.6 in August (revised up from 103.3) to 98.7 in September as the present situation index fell from 134.6 to 124.3 and the expectations index declined from 86.3 to 81.7. The overall index hasn’t moved much in the last couple years, though the present situation metric has trended down since January and it is at its lowest level since early 2021 when it was depressed by COVID. In contrast, the expectations index had risen in recent months and the latest decline still leaves it within the range of recent years.The key news from this report was the decline in the labor market differential, which points to another increase in the unemployment rate in September. The differential, which is the share of respondents reporting jobs are plentiful less the share reporting jobs are hard to get, fell from 15.9% (revised from 16.4%) to 12.6%. While the relationship between monthly changes in the differential and the unemployment rate is noisy, their levels are reasonably correlated over time . A simple regression using their levels indicates that the latest decline in the differential implies a 15bps rise in the unemployment rate. That type of ongoing deterioration, if realized, would likely be supportive of our call that the FOMC will lean toward another 50bps rate cut at their November meeting.The report contained some positive housing news, as the share of respondents planning to buy a home within six months increased from 4.8% to 5.7%. While still somewhat low, this is the highest reading since last August and could reflect households taking into account the decline in mortgage rates over recent months. Less clear was the reason for respondents sudden aversion to carpeting, as the share planning to buy that item within six months suddenly plunged from 10.7% to an all-time low of 5.4%. Depending on one’s view, this could be a sign of good taste or just noise, but either way it demonstrated some logistical consistency within the survey; plans to buy vacuum cleaners also took a dive. See page 5 for analyst certification and important disclosures.US: Labor market concerns stand out in Sep confidence survey 2Abiel Reinhart (1-212) 270 4058abiel.reinhart@jpmchase.comJPMorgan Chase Bank NANorth America Economic ResearchUS: Labor market concerns stand out in Sep confidence survey24 September 2024J P M O R G A N050100