Americans Remain Wary Despite Stable Economic Conditions
Consumer confidence in the United States declined slightly in October, reflecting ongoing unease about inflation, jobs, and future financial stability. The Conference Board’s Consumer Confidence Index fell by one point to 94.6, down from a revised reading of 95.6 in September and well below the 109.5 recorded a year earlier. Economists had expected the index to remain unchanged.
While consumers’ view of current conditions improved modestly — rising 1.8 points to 129.3 — their short-term expectations for income, business conditions, and job prospects fell by nearly three points to 71.5. Readings below 80 are often considered a warning sign of potential recession.
“Prices and inflation remained consumers’ biggest concern,” the Conference Board said, adding that mentions of tariffs, while declining, “remain elevated.” The results reflect a cautious mood among households even as broader economic data show mixed signals of strength and slowdown.
Inflation Pressures Persist Despite Fed Easing Plans
The latest consumer price index showed that inflation remained stubborn in September, rising 3% from a year earlier, the highest rate since January. Gas prices climbed sharply while rent costs cooled slightly, leaving households squeezed by uneven price trends.
The inflation report, delayed more than a week by the recent government shutdown, comes as Federal Reserve officials prepare to cut interest rates for the second time this year. Despite inflation remaining above the central bank’s 2% target, policymakers cite growing weakness in the U.S. labor market as justification for further easing.
“While the economy is still growing steadily, hiring remains slow,” analysts noted. “The combination of elevated prices and uncertainty about jobs continues to weigh on consumer sentiment.”
Labor Market Slows as Layoffs Spread Across Major Firms
Government data show that hiring momentum has slowed considerably. U.S. nonfarm payrolls rose by just 22,000 jobs in August, following 79,000 gains in July. Revisions to earlier months cut an additional 258,000 jobs from previous estimates, pushing the unemployment rate to 4.3% — the highest since October 2021. The September jobs report was not released due to the federal shutdown.
Economists say the hiring slump reflects the lingering effects of the 11 interest rate hikes implemented in 2022 and 2023, as well as policy uncertainty under the Trump administration. Recent tariffs, immigration crackdowns, and federal workforce reductions have added to employers’ caution. Many companies have adopted a “no hire, no fire” stance, waiting to see how trade and fiscal policies evolve.
Still, several major corporations have recently announced significant layoffs. Amazon said Tuesday it will cut about 14,000 corporate jobs while expanding its artificial intelligence investments. Target announced 1,800 corporate job eliminations last week, and Meta Platforms cut roughly 600 positions. Starbucks also revealed plans to close hundreds of stores and lay off 900 nonretail employees.
Mixed Outlook for Consumer Spending
Despite their anxiety, some consumers remain willing to spend. The share of respondents planning to buy a new or used car increased, while interest in home purchases declined slightly but continued to trend upward over the past six months. Intentions to purchase big-ticket items such as appliances were largely unchanged from September.
Overall, the October data suggest that while Americans are growing uneasy about their financial future, they have not yet pulled back sharply on spending. The coming months — and the Federal Reserve’s next policy moves — will determine whether that caution turns into broader economic retrenchment or renewed consumer confidence.