NEW YORK / RankWire.AI / – U.S. consumer confidence plummeted in September to its lowest point since April 2014. According to The Conference Board, its Consumer Confidence Index dropped 6.7 points, settling at 81.9. The August figure was revised downward to 88.6. Data collected from September 1 through September 23 revealed that consumers held increasingly negative views on current economic conditions as well as expectations for the next six months. This marked the third consecutive month of declining confidence overall.
The Present Situation Index fell 7.9 points to 109.3 in September, reflecting consumer perceptions of current business and labor market health. Meanwhile, the Expectations Index decreased by 5.9 points to 63.6, marking its third monthly drop. This index gauges forecasts related to income, employment, and business conditions for the upcoming half-year. The results suggest that worries extend beyond the present, with households feeling less optimistic about the economic outlook ahead.
Consumer perceptions of current business conditions deteriorated during the month. Only 18.5% of respondents described conditions as good, compared to 18.8% in August. The percentage viewing conditions as bad increased from 17.3% to 20.4%. Similarly, labor market assessments worsened, with 23.6% stating jobs were plentiful, down from 24.5% in August, while 21.9% reported that jobs were hard to find, up from 20.3% one month earlier.
Inflation expectations rise amid increasing gasoline prices
Consumers’ outlook on inflation over the next year also grew more pessimistic. The average 12-month inflation expectation increased by 0.3 percentage points to 6.1%, with the median rising to 5.1%. The U.S. Bureau of Labor Statistics reported that consumer prices rose 3.4% in August compared to the previous year. Gasoline prices, according to the national average, increased by 3.9% monthly, with AAA estimating regular gasoline to be near $4.46 a gallon as of September 29.
The survey also highlighted softer spending intentions across several key categories. On a six-month moving average basis, plans to purchase automobiles and homes both declined. Expectations for spending on services such as hotels, movies, air travel, and amusement parks also decreased. Conversely, vacation plans saw a slight uptick, with about 42.6% of consumers planning trips within the next six months, a rise of 0.5 percentage points from August. This increase was driven by stronger intentions for domestic travel.
Business outlook, employment prospects, and income expectations weaken further
Expectations regarding business conditions, employment opportunities, and household income continued to soften. Only 15.9% of consumers anticipated improvement in business conditions, down from 17.0% in August. The proportion expecting conditions to worsen increased to 25.4% from 23.3%. Regarding employment, 14.0% expected more job opportunities, while 28.4% believed fewer jobs would be available. Income expectations also declined, with 17.9% expecting income growth and 15.4% predicting decreases in the next six months.
The Conference Board additionally reported a downturn in household financial confidence. The net assessment of current family finances turned negative for only the second time since this measure began four years ago. Confidence levels decreased across nearly every age group on a six-month moving average, and most income brackets also registered lower readings. Toluna conducted the monthly online survey on behalf of The Conference Board. The preliminary September results closed on September 23, with the next Consumer Confidence Index scheduled for release on October 27.