A report released by the Conference Board on Tuesday showed a much bigger than expected decrease in U.S. consumer confidence in the month of September.
The Conference Board said its consumer confidence index tumbled to 103.0 in September from an upwardly revised 108.7 in August.
Economists had expected the consumer confidence index to edge down to 105.8 from the 106.1 originally reported for the previous month.
"Write-in responses showed that consumers continued to be preoccupied with rising prices in general, and for groceries and gasoline in particular," said Dana Peterson, Chief Economist at The Conference Board. "Consumers also expressed concerns about the political situation and higher interest rates."
She added, "The decline in consumer confidence was evident across all age groups, and notably among consumers with household incomes of $50,000 or more."
The steep drop by the headline index was partly due to a significant deterioration in consumer expectations, as the expectations index tumbled to 73.7 in September from 83.3 in August.
The Conference Board noted an expectations index reading below 80 historically signals a recession within the next year.
Meanwhile, the report said the present situation index crept up to 147.1 in September from 146.7 in August.
"Assessments of the present situation were little changed overall, due to divergent views on the state of business conditions and job availability," said Peterson.
"Fewer consumers said that business conditions were good, but fewer also said they were bad," she added. "Regarding the employment situation, slightly more consumers said that jobs were 'plentiful,' but also slightly more said that jobs were 'hard to get.'"
