NEW YORK / RankWire.AI / – U.S. consumer confidence dropped to its lowest point since April 2014 in September, continuing a three-month downward trend in household sentiment. The Conference Board announced that its Consumer Confidence Index decreased by 6.7 points to 81.9, with August’s figure revised downward to 88.6. Data collected from September 1 through September 23 informed this survey, which showed weakening in both current conditions and expectations for the upcoming six months.
The Present Situation Index declined 7.9 points to 109.3, indicating a more pessimistic outlook on business and labor markets. Meanwhile, the Expectations Index fell 5.9 points to 63.6, marking its third consecutive monthly decrease. This index gauges consumer opinions on income, business conditions, and employment prospects over the next half-year. The declines in July, August, and now September contributed to driving the overall confidence score further below earlier this year’s levels.
The survey conducted by The Conference Board revealed a noticeable shift in consumers’ views regarding current economic conditions. About 18.5% of respondents described business conditions as good, slightly lower than the 18.8% recorded in August. Conversely, those rating conditions as bad increased to 20.4% from 17.3%. Perspectives on the labor market also deteriorated, with 23.6% of consumers stating jobs were plentiful, down from 24.5%, and 21.9% indicating jobs were hard to find, up from 20.3%.
Inflation expectations climb amid sustained fuel prices
In September, consumers also reported higher inflation expectations. The average 12-month inflation forecast increased by 0.3 percentage points to 6.1%, while the median rose to 5.1%. Separate data from the federal government showed consumer prices increased 3.4% in August compared to the previous year. The U.S. Bureau of Labor Statistics reported gasoline prices rose 3.9% during August, and AAA stated that the national average for regular gasoline was approximately $4.46 per gallon on September 29.
Plans for upcoming spending exhibited signs of caution across various categories. On a six-month moving average, intentions to purchase automobiles and homes both edged downward in September. Expectations for service-related expenditures, including hotels, movies, air travel, and amusement parks, also decreased. However, vacation plans remained relatively resilient, with 42.6% of consumers intending to travel within the next six months—a 0.5 percentage point increase from August, mainly driven by domestic trips.
Expectations for employment and income soften further
Forecasts regarding business prospects, employment, and income prospects also experienced a decline. Only 15.9% of consumers anticipated an improvement in business conditions, compared to 17.0% in August. The proportion expecting conditions to worsen rose to 25.4% from 23.3%. Additionally, 14.0% of respondents expected more jobs to become available, whereas 28.4% foresaw fewer opportunities. Income expectations also diminished, with 17.9% expecting increases and 15.4% predicting decreases over the next six months.
The survey further highlighted broader financial pressures on households. Net views of current family finances turned negative for only the second time since this measure was introduced four years ago. Confidence levels declined across all age and income groups based on a six-month moving average. The online monthly survey, conducted by Toluna for The Conference Board, had preliminary results closed on September 23. The next release of the Consumer Confidence Index is scheduled for October 27.