“The consumer is holding up in the U.S., there is no doubt about that. We believe it will be a healthy peak season. We think e-commerce will continue to grow,” UPS CEO David Abney told Yahoo Finance.
Despite Abney’s upbeat read on a key linchpin of the economy, there are cracks starting to emerge in the U.S. consumer is strong thesis. Full blame goes to rising uncertainty among consumers on the impact on their wallets from the Trump administration’s trade war with China.
U.S. consumer confidence plunged by the most in nine months in September, according to the latest from the Conference Board. The expectations index — which gauges the short-term outlook among consumers for income and labor conditions — fell 11 points from August.
“Consumers were less positive in their assessment of current conditions and their expectations regarding the short-term outlook also weakened. The escalation in trade and tariff tensions in late August appears to have rattled consumers,” said Lynn Franco, senior director of economic indicators at The Conference Board, in a statement.
The September Michigan Sentiment index sighted a “slow erosion” in consumer confidence. Meanwhile, investors are still digesting the negative read on U.S. demand from a dour FedEx earnings report in September. The latest ISM U.S. purchasing managers index (which tanked the stock market on Tuesday) called out the lowest reading on manufacturing employment going back to January 2016.
Nevertheless, UPS is full steam ahead on its big holiday season hiring plans in the face of yawning consumer spending uncertainty. The company said in September it would hire 100,000 seasonal holiday workers to handle peak shopping demand in November and December.