Shopper confidence is decrease than anticipated as Wall Avenue prepares for a shutdown information outage

Consumer confidence fell slightly in September, ahead of an expected data outage due to the looming federal government shutdown, the Conference Board reported Tuesday.

The board’s overall confidence index recorded a reading of 94.2, 3.6 points below the August reading and below the Dow Jones estimate of 96.0. The figure was the lowest since April and coincides with the closure of non-essential government operations at midnight.

In addition to the weakness in the main asset, the “current situation” index reached its lowest level in a year.

“Consumers’ assessment of business conditions was much less positive than in recent months, while their assessment of current work availability fell for the ninth straight month and hit a new multi-year low,” said Stephanie Guichard, senior economist at the Organization for Global Indicators.

Although the labor market has shown significant weakness this year, job availability was slightly better in August than in the previous month.

The Bureau of Labor Statistics, in what may be its final data release until the spending crisis on Capitol Hill is resolved, said there were 7.23 million total job openings, up 19,000 from July but down 422,000, or 5.5%, from the same period last year.

The FBI’s job vacancies and labor turnover report, which Federal Reserve officials are closely watching to gauge the slack in the labor market, showed a slower pace of both hiring and outright layoffs. The number of layoffs fell by 75,000 in a category considered a measure of workers’ confidence in finding a new job after leaving their current job.

Labor market stability is an important consideration for the Fed as officials consider the next move on interest rates. Markets widely expect the central bank to cut its key interest rate by half a percentage point by the end of the year, with the cuts coming at meetings in October and December.

“My fundamental outlook does not call for further weakening of the labor market – but there are risks,” Boston Fed President Susan Collins said on Tuesday. “In particular, I see an increased risk that demand for labor will significantly underperform supply, which could lead to a more significant and undesirable increase in the unemployment rate.”

If the spending crisis is resolved by Friday, the BLS is expected to see job growth of 51,000 in September, up from just 22,000 in August.

The Conference Board report showed a growing gap in labor market perceptions.

The share of respondents saying jobs were “abundant” fell to 26.9%, down more than 3 percentage points from August, while the “hard to get” figure remained steady at 19.1%.

Additionally, the survey showed greater pessimism about finances, as views about their current financial situation recorded the largest one-month decline since the question was asked in July 2022.