Washington (AFP) - American consumers' faith in the US economy has taken a hit as President Donald Trump's trade war with China escalates, according to a survey published Tuesday.
Consumer confidence fell sharply in September, the second straight monthly decline, as fears rose that jobs will soon no longer be so plentiful and business conditions will worsen, according to the Conference Board.
The Consumer Confidence Index fell to its lowest level since June, dropping 9.1 points to 125.1, well below what economists had been expecting.
Weakening confidence could erode consumer spending, which has been a primary engine of the US economy, which would weaken GDP growth. The trade dispute already has depressed business investment.
"The escalation in trade and tariff tensions in late August appears to have rattled consumers," Lynn Franco, the board's head of economic indicators, said in a statement.
As the trade war with China drags into a second year, she added, consumers may begin showing some fatigue.
"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," she added.
The cutoff date for collecting the survey's data was in mid-September, capping a period which included sharp increases in tariffs on Chinese imports and stinging losses on Wall Street.
According to the survey, fewer people believe current business conditions are good and jobs are plentiful.
Fewer than one in five now say business conditions will improve in six months' time, that more jobs will become available or that their incomes will increase. The share of those expecting business conditions to worsen also crept four points higher to 14.3 percent.
"Grim all around," said Ian Shepherdson of Pantheon Macroeconomics.
He noted in his analysis that the share of people now conditions to worsen in six months is at a six-year high.
"It's now in line with the readings seen just before the recessions of 1990, 2001, and 2007, so it needs to be watched closely," he said.