NEW YORK / RankWire.AI / – U.S. consumer confidence plummeted sharply in September, reaching its lowest point since April 2014. According to The Conference Board, the Consumer Confidence Index fell 6.7 points to 81.9, with the August figure revised downward to 88.6. The data was collected from responses between September 1 and September 23. Consumers expressed more pessimism about the current economic climate and their six-month outlook. This marked the third consecutive month of declining overall confidence.
In September, the Present Situation Index decreased 7.9 points to 109.3, reflecting consumers’ views on current business and labor market conditions. The Expectations Index dropped 5.9 points to 63.6, marking a third month of decline as well. This index gauges consumer expectations for income, employment, and business conditions over the next six months. The figures indicate concerns extend beyond the present environment, with households feeling less optimistic about the economic prospects ahead.
Perceptions of the current business environment weakened during the month. About 18.5% of consumers described conditions as good, slightly below the 18.8% in August. Conversely, those viewing conditions as bad increased to 20.4% from 17.3%. Assessments of the labor market also declined, with 23.6% saying jobs were plentiful, down from 24.5% in August. Meanwhile, 21.9% said jobs were hard to find, compared to 20.3% the previous month.
Inflation expectations rise amid climbing gasoline prices
Expectations for inflation over the next year grew as well, with the average 12-month inflation outlook increasing by 0.3 percentage points to 6.1%. The median estimate rose to 5.1%. Data from the U.S. Bureau of Labor Statistics revealed consumer prices increased by 3.4% in August compared to the previous year. The national average price for regular gasoline stood near $4.46 a gallon on September 29, according to AAA, while the BLS reported a 3.9% monthly increase in gasoline prices.
Additionally, consumers indicated softer spending intentions across several key categories. On a six-month moving average, plans to purchase automobiles and homes both declined, and expectations for spending on services such as hotels, movies, air travel, and amusement parks also decreased in September. Conversely, vacation plans experienced an uptick, with approximately 42.6% of respondents planning a trip within six months—an increase of 0.5 percentage points from August. This rise was primarily driven by stronger intentions for domestic travel.
Outlooks for business, jobs, and income face further weakening
Expectations surrounding business conditions, employment, and household income continued to decline. Only 15.9% of consumers anticipated an improvement in business conditions, down from 17.0% in August. The proportion expecting conditions to worsen increased to 25.4% from 23.3%. Meanwhile, just 14.0% expected more jobs to be available, while 28.4% projected fewer jobs. Income expectations also softened, with 17.9% expecting income growth and 15.4% anticipating a decline over the next six months.
The Conference Board also reported a decrease in household financial outlooks. Net assessments of current family finances turned negative for only the second time since that measure began four years ago. Confidence levels fell across every age group on a six-month moving average. Nearly all income brackets also posted lower readings. The monthly online survey for The Conference Board is conducted by Toluna, with the September preliminary results closing on September 23. The next Consumer Confidence Index release is scheduled for October 27.