Consumer confidence in the US declined for the second month in a row in September as <a href="https://www.thenationalnews.com/business/economy/2023/09/14/us-inflation-cpi-report/" target="_blank">rising prices</a>, elevated <a href="https://www.thenationalnews.com/business/economy/2023/09/20/fed-interest-rate-pause/" target="_blank">interest rates</a> and the political climate added to fears over America's economy. The <a href="https://www.thenationalnews.com/business/economy/2023/08/29/us-job-vacancies-at-lowest-level-since-2021-as-consumer-confidence-dips/" target="_blank">Consumer Confidence</a> Index declined to 103, down from 108.7 in August, according to The Conference Board, a non-profit business membership and research group. The Expectations Index, which is based on short-term outlook, tumbled to 73.7 from 83.3. A level below 80 typically indicates a recession in the coming year. The decline in confidence was across all age groups, as well as households with an income of more than $50,000. “Consumers continued to be preoccupied with rising prices in general, and for groceries and gasoline [petrol] in particular,” said Dana Peterson, chief economist at The Conference Board. Consumers also expressed concerns about the political situation and higher interest rates, Ms Peterson said. Tuesday's report reflects headwinds that consumers face. Petrol prices were the largest factor for US inflation, ticking back up again in August. Rising oil prices have caused drivers to pay more at the pump, with the average motorist spending $3.83 per gallon, according to the American Automobile Association. Food prices also increased over July and August, the US Labour Department reported earlier this month. Meanwhile, the Federal Reserve indicated that its interest rates are likely to stay elevated for a more prolonged period. This means that borrowing costs such as credit card payments and loans will remain expensive. “Consumers may be hearing more bad news about corporate earnings, while job openings are narrowing, and interest rates continue to rise – making big-ticket items more expensive,” said Ms Peterson. Consumer spending accounts for 70 per cent of economic activity. Generally, when consumer confidence is low, more people save money than spend it which causes the economy to contract. More consumers this month also said that a recession is “somewhat” or “very likely”, which appears to go against the soft landing that the Fed is aiming to achieve by raising interest rates. The US economy has so far proved resilient amid the Fed's aggressive interest rates increases. Economic growth has exceeded expectations and employers added 187,000 jobs in August, a sign that the labour market is coming into better balance. With inflation falling and hiring remaining strong, hopes have grown that the Fed's objective of slowing the economy without dipping into a recession remains well in sight. The Fed is due to receive another inflation reading – the Price Consumption Expenditures Price Index – on Friday.