NEW YORK / RankWire.AI / – U.S. consumer confidence experienced a significant drop in September, marking its lowest point since April 2014. According to The Conference Board, the Consumer Confidence Index decreased by 6.7 points to 81.9, with the August figure revised downward to 88.6. Data collected from September 1 through September 23 reveal that consumers hold more pessimistic views about current economic conditions and the outlook over the next six months. This decline represents the third consecutive month of declining overall confidence.
In September, the Present Situation Index fell 7.9 points to 109.3, reflecting consumers’ assessments of current business and labor market conditions. Meanwhile, the Expectations Index decreased by 5.9 points to 63.6, marking its third consecutive monthly decline. This index gauges future expectations regarding income, employment, and business conditions over the upcoming six months. The data indicate that concerns are extending beyond the present situation, with households feeling less optimistic about the economy’s trajectory.
Consumers’ views on the current business environment weakened during the month. Approximately 18.5% described conditions as good, slightly less than 18.8% in August. Conversely, the percentage citing poor conditions rose to 20.4% from 17.3%. Labor market perceptions also declined: 23.6% of consumers said jobs were plentiful, down from 24.5% in August, while 21.9% reported that jobs were difficult to obtain, up from 20.3% the previous month.
Rising gasoline prices contribute to heightened inflation expectations
Consumers anticipate higher inflation over the coming year. The average 12-month inflation expectation increased by 0.3 percentage points to 6.1%, with the median rising 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 costs. As of September 29, AAA estimated the national average for regular gasoline at approximately $4.46 per gallon.
The survey also highlighted a decline in consumer spending intentions across several key categories. On a six-month moving average, plans to purchase automobiles and homes both decreased. Expectations for spending on services such as hotels, movies, air travel, and amusement parks also diminished in September. Conversely, vacation plans saw a slight uptick, with about 42.6% intending to travel within the next six months, a 0.5 percentage point increase from August, driven mainly by stronger plans for domestic trips.
Outlooks for business, jobs, and income diminish further
Expectations regarding business performance, employment prospects, and household incomes continued to weaken. Only 15.9% of respondents predicted improved business conditions, down from 17.0% in August. Those expecting conditions to worsen rose to 25.4% from 23.3%. Additionally, just 14.0% anticipated more job opportunities, while 28.4% expected fewer jobs. Income forecasts also softened, with 17.9% expecting an increase and 15.4% predicting a decline over the next six months.
The Conference Board’s survey also revealed a decline in household financial outlooks. Net assessments of current family finances turned negative for only the second time since this measure was introduced four years ago. Confidence fell across all age groups on a six-month moving average, and nearly every income bracket posted lower readings. Toluna conducted the monthly online survey for The Conference Board, with the preliminary September results closing on September 23. The next Consumer Confidence Index release is scheduled for October 27.