NEW YORK / RankWire.AI / – U.S. consumer confidence experienced a significant drop in September, hitting 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 reflected consumers’ more pessimistic outlooks on current economic conditions and the six-month forecast. This decline represents the third consecutive month of overall confidence reduction.
The Present Situation Index fell 7.9 points to 109.3 in September, indicating consumers’ views on the current business and labor market conditions. Meanwhile, the Expectations Index declined 5.9 points to 63.6, marking a third straight monthly decrease. This index gauges outlooks for income, employment, and business conditions over the coming six months. The results suggest that concerns extend beyond the present situation, as households have become less optimistic about the economic environment ahead.
In September, perceptions of current business conditions weakened. About 18.5% of consumers described conditions as good, slightly down from 18.8% in August. Conversely, those viewing conditions as bad increased to 20.4% from 17.3%. Labor market evaluations also dipped; 23.6% said jobs were plentiful, compared to 24.5% in August, while 21.9% reported jobs were hard to find, up from 20.3%.
Inflation expectations rise amid increasing gasoline prices
Consumers’ expectations for inflation over the next year grew as gasoline prices rose. The average 12-month inflation forecast increased by 0.3 percentage points to 6.1%, with the median rising to 5.1%. According to federal data, consumer prices climbed 3.4% in August compared to the previous year. The U.S. Bureau of Labor Statistics reported a 3.9% monthly increase in gasoline prices. As of September 29, AAA estimated the national average for regular gasoline to be approximately $4.46 per gallon.
The survey also indicated softer spending intentions across several major categories. Using a six-month moving average, plans 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 increased; about 42.6% of consumers planned trips within six months, a 0.5 percentage point rise from August. This uptick was driven primarily by stronger intentions for domestic travel.
Outlooks for business, employment, and income weaken further
Expectations regarding business conditions, employment, and household income continued to diminish. Only 15.9% anticipated an improvement in business conditions, down from 17.0% in August. Meanwhile, those expecting conditions to worsen increased to 25.4% from 23.3%. The percentage of consumers expecting more job opportunities dropped to 14.0%, while 28.4% foresaw fewer jobs. Income expectations also softened, with 17.9% expecting income growth and 15.4% expecting declines over the next six months.
Additionally, the Conference Board noted a decline in confidence regarding household finances. Net assessments of current family financial situations turned negative for only the second time in four years. Confidence levels decreased across all age groups based on a six-month moving average, and nearly all income brackets showed lower readings. Toluna conducted the monthly online survey for The Conference Board. The preliminary September results closed on September 23, with the next Consumer Confidence Index release scheduled for October 27.