(SRN NEWS/REUTERS) – Consumer confidence plunged to a near 12-1/2-year low in September, with households expecting a deterioration in business and labor market conditions over the next six months amid the Middle East conflict and rising interest rates.
The Conference Board survey on Tuesday mirrored other polls showing growing disenchantment over the economy heading into the November 3 midterm elections, which will determine control of Congress. The US-Israeli war has raised energy prices, stoking inflation and prompting the Federal Reserve to raise interest rates this month for the first time in three years.
The rising cost of living has manifested itself in higher prices at the pump and supermarket as well as mortgage rates. Diesel prices are at a record high. Economists say the war has created an uncertain business environment and hindered employers’ ability to hire more workers.
“The economy is stagnant for the typical American household, which has been caused by the erratic public policy environment that makes it tough for businesses and households to plan for the future,” said Kyle Moore, chief economist at The Century Foundation.
The Conference Board said its consumer confidence index plummeted 6.7 points this month to 81.9, the lowest level since April 2014. Economists polled by Reuters had forecast the index at 89.2. The deterioration in confidence was across political party affiliation, age and income groups.
The findings are similar to last week’s University of Michigan’s Surveys of Consumers report.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci )