NEW YORK / RankWire.AI / – U.S. consumer confidence experienced a sharp decline in September, hitting its lowest level since April 2014. The Conference Board reported that its Consumer Confidence Index decreased by 6.7 points to 81.9, with the August figure being revised downward to 88.6. The survey, conducted from September 1 through September 23, revealed consumer pessimism about current economic conditions and their six-month outlook. This drop marks the third consecutive month of declining overall confidence.
The Present Situation Index fell 7.9 points to 109.3 in September, reflecting consumer perceptions of current business and labor market conditions. Meanwhile, the Expectations Index declined 5.9 points to 63.6, marking a third consecutive monthly decrease. It gauges expectations for income, employment, and business conditions over the upcoming six months. The data indicated that concerns extended beyond current conditions, with households also becoming less optimistic about future economic prospects.
Perceptions of current business conditions weakened during the month. Only 18.5% of consumers described conditions as good, compared to 18.8% in August. Conversely, the percentage of those rating conditions as bad increased to 20.4% from 17.3%. Labor market evaluations also declined, with 23.6% saying jobs were plentiful, down from 24.5% in August. Conversely, 21.9% reported that jobs were hard to find, up from 20.3% the previous month.
Inflation expectations rise amid rising gasoline prices
Consumers’ forecasts for inflation over the next year also grew more cautious. The average 12-month inflation expectation increased by 0.3 percentage points to 6.1%, while the median expectation rose to 5.1%. Federal data showed consumer prices increased by 3.4% in August from a year earlier. The U.S. Bureau of Labor Statistics reported that gasoline prices surged 3.9% in the same period. As of September 29, AAA estimated the national average for regular gasoline at nearly $4.46 per gallon, according to this source.
Spending plans across several major categories also softened. On a six-month moving average, intentions to purchase automobiles and homes both declined. Expectations for spending on services such as hotels, movies, air travel, and amusement parks also decreased during September. Conversely, vacation plans grew stronger, with about 42.6% of consumers indicating an intention to travel within six months—an increase of 0.5 percentage points from August—primarily driven by increased domestic travel plans.
Business outlook, employment prospects, and income expectations weaken further
Forecasts for business conditions, employment, and household income continued to deteriorate. 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%. Expectations for job availability also declined, with just 14.0% predicting more jobs and 28.4% expecting fewer jobs. Income outlooks eased as well, with 17.9% expecting income increases and 15.4% forecasting income drops over the next six months.
The Conference Board also observed a decline in household financial sentiment. Net assessments of current family finances turned negative for only the second time in four years. Confidence levels fell across every age group on a six-month moving average, and nearly all income groups also posted lower readings. Toluna conducts this monthly online survey for The Conference Board. The preliminary results for September closed on September 23, with the next Consumer Confidence Index scheduled for release on October 27.