Chart of the Day

As we've been reporting herein, the consumer remains the heavy-lifter for the U.S. economy, and, thus, we need to be very sensitive to any signals suggesting that maybe he/she's feeling a bit weak in the knees.

While I wouldn't characterize this morning's release of the Conference Board's consumer confidence survey as dire, it's not what it's been.

Here's Econoday's commentary:

Highlights
The consumer confidence index had been showing exceptional strength but did fall back unexpectedly in September to 125.1 which is down sharply from a revised 134.2 in August and 135.8 in July. Nevertheless, this index has been trending higher this year in continued contrast to the rival consumer sentiment index which has been slumping noticeably.

The difference between the two indexes is the focus on labor market factors which are central to the consumer confidence report and where today's results are mixed. Those saying jobs are currently hard-to-get did fall 4 tenths to 11.6 percent, which is a positive indication of increasing strength, in contrast to those who say jobs are currently plentiful which fell 5.5 percentage points to 44.8 percent. The outlook for future employment strength is negative with fewer saying there will be more jobs (17.5 vs August's 19.9 percent) and more saying there will be fewer jobs (15.7 vs 13.7 percent).

A strong negative in today's report is a sharp decline in those who see their income improving over the next months, falling to 19.0 percent versus August's 24.7 percent, a downturn reflecting not only caution over the jobs outlook but also a tangible drop in stock market confidence where bears, at 35.3 percent, now outnumber bulls at 31.6 percent. This is the first time since January this year that bears are on top.

Among other readings, inflation expectations are flat at 4.8 percent, down 1 tenth for this reading from August, with buying plans all noticeably lower including for autos and homes.

Today's report offers a measure of caution and if nothing else suggests that further acceleration in consumer spending, which the Federal Reserve considers to be by far the strongest segment of the economy, may be limited.

With the Conference Board's September miss, two of the three consumer sentiment markers we track are beginning to look suspect (shaded areas denote past recessions):