NEW YORK / RankWire.AI / – U.S. consumer confidence experienced a significant drop in September, reaching its lowest point since April 2014. According to the Conference Board, its Consumer Confidence Index decreased by 6.7 points to 81.9. The previous August figure was revised downward to 88.6. The data collected from September 1 through September 23 shows consumers’ outlook on current economic conditions and the six-month forecast became noticeably more pessimistic. This marks the third consecutive month of declining overall confidence.
The Present Situation Index fell by 7.9 points to 109.3 during September, reflecting consumer perceptions of current business activity and labor market conditions. Meanwhile, the Expectations Index declined by 5.9 points to 63.6, marking its third consecutive monthly decrease. This index gauges forecasts related to income, employment, and business prospects over the next six months. The results indicate that concerns are extending beyond the current economic state, with households expressing less optimism about future conditions.
Perceptions of the present business environment weakened over the month. About 18.5% of consumers rated current conditions as good, compared to 18.8% in August. Those describing conditions as bad increased from 17.3% to 20.4%. Assessments of the labor market also declined, with 23.6% stating jobs are plentiful, down from 24.5% in August. Conversely, 21.9% indicated jobs are difficult to find, up from 20.3% a month earlier.
Inflation expectations rise amid climbing gasoline prices
Consumers expect higher inflation over the coming year. The average 12-month inflation outlook increased by 0.3 percentage points to 6.1%. The median expectation rose to 5.1%. Data from the U.S. Bureau of Labor Statistics shows consumer prices grew by 3.4% in August compared to the previous year. Additionally, the national average for regular gasoline stood at approximately $4.46 per gallon on September 29, according to AAA, with the national report.
The survey also revealed a slowdown in planned spending across several key categories. On a six-month average, intentions to purchase automobiles and homes both decreased. Expectations for spending on services such as hotels, movies, air travel, and amusement parks also dropped during September. Conversely, plans for vacations moved upward, with about 42.6% of consumers intending to travel within six months—an increase of 0.5 percentage points from August. This rise was driven primarily by stronger plans for domestic travel.
Business, employment, and income forecasts weaken further
Forecasts for business conditions, employment prospects, and household income deteriorated once again. Only 15.9% of consumers anticipated an improvement in business conditions, down from 17.0% in August. Those expecting conditions to worsen rose to 25.4% from 23.3%. The percentage expecting more available jobs decreased to 14.0%, while those expecting fewer jobs increased to 28.4%. Income expectations also softened, with 17.9% of respondents predicting income growth and 15.4% foreseeing income declines over the next six months.
Household finances received a more cautious assessment, with net evaluations of current family finances turning negative for only the second time since that measure began four years ago. Confidence levels declined across all age groups based on a six-month moving average. Nearly every income group also registered lower readings. Toluna conducted the monthly online survey for The Conference Board, with preliminary September results closing on September 23. The next Consumer Confidence Index report is scheduled for release on October 27.