NEW YORK / RankWire.AI / – U.S. consumer confidence experienced a sharp decline in September, reaching its lowest point since April 2014. The Conference Board announced that its Consumer Confidence Index dropped 6.7 points to 81.9. Meanwhile, the August figure was revised downward to 88.6. The data for September was gathered from responses collected between September 1 and September 23. Consumers expressed more pessimism about current economic conditions and their expectations for the next six months. This decrease marked the third consecutive month of falling confidence overall.
The Present Situation Index fell 7.9 points to 109.3 in September, reflecting consumers’ views on the current state of business and the labor market. The Expectations Index also declined, losing 5.9 points to 63.6, marking its third consecutive monthly decrease. This index measures anticipated income, employment prospects, and business conditions over the upcoming six months. The figures indicate concerns that go beyond current conditions, as households have become less optimistic about the economic outlook ahead.
Perceptions of current business conditions weakened during the month. Approximately 18.5% of consumers rated conditions as good, compared to 18.8% in August. Conversely, those describing conditions as bad increased to 20.4% from 17.3%. Assessments of the labor market also declined; 23.6% said jobs were plentiful, down from 24.5% in August, while 21.9% reported that jobs were hard to find, up from 20.3% the previous month.
Inflation expectations rise amid increasing gasoline prices
Consumers also anticipate higher inflation over the next 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 indicated that consumer prices grew 3.4% in August compared to the previous year. The national average for regular gasoline was near $4.46 per gallon on September 29, according to AAA, with the national average slightly elevated.
The survey also revealed a softening in consumers’ spending intentions across several key categories. On a six-month moving average, planned purchases of 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 saw an uptick, with about 42.6% of consumers intending to travel within six months, an increase of 0.5 percentage points from August, mainly driven by stronger plans for domestic trips.
Outlook for business, employment, and income weakens further
Expectations regarding business conditions, employment opportunities, and household incomes diminished once again. 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%. Just 14.0% of respondents thought more jobs would become available, while 28.4% anticipated fewer jobs. Income outlooks also softened; about 17.9% expected income growth, and 15.4% forecasted income declines during the next six months.
The Conference Board also noted a decline in confidence about household finances. Net assessments of current family financial situations turned negative for only the second time since this measure was introduced four years ago. Confidence levels fell across every age group on a six-month average, and nearly all income segments posted 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 scheduled for release on October 27.