Data released on Tuesday showed a decline in September in Consumer confidence. With no shortage of other factors to blame, such as wildfires, war, hurricanes and a border crisis, analysts at Wells Fargo see room for improvement in coming months.
Key Quotes:
“Consumer confidence fell to 109.3 from 115.2; that puts confidence at a seven-month low as COVID cases continued to pile up during September.”
“A strong labor market might be the only thing giving consumers much cheer these days amid an onslaught of negative news. Notably, despite the declines in overall confidence, expectations and the present situation indices, the share of consumers saying that jobs are plentiful rose to its highest level on record. In figures going back to the 1960s, there has never been a greater consensus among consumers that jobs are plentiful at the moment.”
“After a strong run for summer payroll reports, August's lackluster 235K gain was a disappointment. Our read is that the soft hiring was more a function of lack of available labor than a slowing in hiring. That said, initial jobless claims have risen in two out of the three weeks so far in September. While consumers know there are a lot of opportunities out there currently, they are more concerned about what employment will look like in a few months. This may also just be the consequence of coming off of a hot labor market and the expectation that things can only be so good for so long.”
“Next week's employment report should be able to shed more light on the state of the labor market and whether August was a blip, as we suspect, or the start of a weaker trend.”