Nonprofits face a mixed bag of economic news in the early days of October. While jobless rates have continued a slow rebound, the stock market in September was topsy-turvy, and consumer confidence remains depressed.
The following economic indicators, which experts say are important to nonprofits, showed notable developments since our previous economic update.
Stock Market
For the first time in 2021, major stock indices fell month-to-month. Both the S&P 500 and the Nasdaq Composite had their worst month since March 2020, falling roughly 5 percent in September. The Dow Jones Industrial Average lost 500 points on the last day of September to close the month 4.3 percent down from August.
The long-term picture is more optimistic. So far this year, all major stock indices are up considerably — from 13 to 17 percent.
John List, a behavioral economist at the University of Chicago who studies giving, said September’s economic news likely won’t have a big effect on giving patterns.
“Beliefs about future states of the world will always affect current giving patterns,” List noted. “That said, our research teaches us that stock-market swoons affect overall giving much less than stock-market rallies. So this mixed bag of evidence will likely not affect macro giving patterns much.”
Consumer Confidence
Consumers were more optimistic in September, but only slightly, according to the latest figures from the University of Michigan’s Surveys of Consumers. Over all, consumer sentiment stands at a score of 72.8 out of a possible of 100, up 3.6 percent from August but down 9.5 percent from last year. While the Delta variant-driven surge in Covid-19 cases is ebbing, consumers continue to have major concerns about inflation and are postponing big spending.
Unemployment
The national unemployment rate fell slightly to 5.2 percent in August, a steady decline from around 6 percent at the start of the year. But employment rates vary significantly across the country. Nevada has the highest unemployment rate, at more than 7 percent, while Nebraska has the lowest, about 2.2 percent.
The number of long-term unemployed people fell to 3.2 million, still 2.1 million more than before the pandemic in February 2020. These figures suggest persistent demand for services from nonprofits that assist the poor and unemployed.
