U.S. consumer confidence declined more than forecast in September as Americans’ expectations for the economy and the job market deteriorated, posing a risk to the household spending that is underpinning growth.

The Conference Board’s index decreased to a three-month low of 125.1 from a downwardly revised 134.2 a month earlier, according to data from the New York-based group. The median forecast in a Bloomberg survey of economists called for 133. The gauge of views on the present situation eased, while the expectations gauge dropped to the lowest level since January.

Key Insights

• U.S. stocks pared gains and Treasury yields fell after the report.
• The report shows trade war concerns and the economic impact are filtering through to Americans’ sentiment at the same time businesses contend with fragile global growth and supply-chain challenges tied to antagonistic government trade policy.
• The share of respondents who say jobs are currently plentiful dropped to a three-month low, while the share saying jobs are hard to get cooled.
• The Conference Board’s measure had recently been at odds with the University of Michigan’s index of sentiment, which has deteriorated since July. Economists at Deutsche Bank Securities posit that the gap widens ahead of recessions because the former is more backward-looking with its focus on employment, while the Michigan gauge is slightly more forward-looking because of its emphasis on personal finances.

Official’s View

“The escalation in trade and tariff tensions in late August appears to have rattled consumers,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. “However, this pattern of uncertainty and volatility has persisted for much of the year and it appears confidence is plateauing. While confidence could continue hovering around current levels for months to come, at some point this continued uncertainty will begin to diminish consumers’ confidence in the expansion.”