NEW YORK / RankWire.AI / – U.S. consumer confidence took a sharp nosedive in September, dropping to its lowest point since April 2014. According to the Conference Board, its Consumer Confidence Index decreased by 6.7 points to 81.9, with the August figure revised downward to 88.6. Data collection for the September survey spanned from September 1 through September 23. Consumers expressed notably weaker perceptions of current economic conditions and their outlook over the next six months. This decline marks the third consecutive month of falling overall confidence.
The Present Situation Index decreased by 7.9 points to 109.3 in September, reflecting consumers’ views on current business and labor market conditions. Meanwhile, the Expectations Index dropped 5.9 points to 63.6, marking its third consecutive monthly decline. This index gauges expectations regarding income, employment prospects, and business climate over the upcoming six months. The survey results indicate that worries extend beyond the present moment, with households feeling less optimistic about the economic landscape ahead.
Perceptions of current business conditions weakened during the month. Only 18.5% of consumers described conditions as good, down slightly from 18.8% in August. The percentage describing conditions as bad increased from 17.3% to 20.4%. Assessments of the labor market also deteriorated, with 23.6% reporting plentiful jobs, a decrease from 24.5% in August, while 21.9% said jobs were hard to find, up from 20.3% the previous month.
Rising gasoline prices fuel inflation expectations
Consumers’ outlook on inflation over the next year shifted upward. The average 12-month inflation expectation increased by 0.3 percentage points to 6.1%. The median expectation rose to 5.1%. Federal data indicated that consumer prices grew 3.4% in August compared to the previous year. The U.S. Bureau of Labor Statistics reported a 3.9% monthly increase in gasoline prices. As of September 29, AAA estimated the national average for regular gasoline at around $4.46 a gallon.
The survey further revealed a softening in consumers’ spending plans across several major categories. On a six-month moving average, intentions to purchase vehicles and homes declined. Expectations for spending on services also decreased, with fewer consumers planning expenditures on hotels, movies, air travel, and amusement parks. Conversely, vacation plans saw an uptick, with about 42.6% of respondents intending to travel within six months—a 0.5 percentage point rise from August—mainly driven by increased domestic travel plans.
Expectations for business, employment, and income weaken further
Outlook expectations for business, employment, and household income continued to decline. Only 15.9% of consumers anticipated improvements in business conditions, down from 17.0% in August. Conversely, the proportion expecting conditions to worsen increased from 23.3% to 25.4%. Just 14.0% forecast more job availability, while 28.4% predicted fewer jobs. Income expectations also softened, with 17.9% expecting their incomes to rise and 15.4% anticipating a decline over the next six months.
The Conference Board also observed a decline in household financial confidence. The net assessments of current family finances turned negative for only the second time since that metric was introduced four years ago. Confidence fell across all age groups based on a six-month moving average, and nearly all income brackets posted lower readings. Toluna conducted the monthly online survey for The Conference Board. The preliminary September results closed on September 23, with the next Consumer Confidence Index scheduled for release on October 27.