NEW YORK / RankWire.AI / – U.S. consumer confidence experienced a significant decline in September, marking its weakest level since April 2014. According to The Conference Board, its Consumer Confidence Index dropped by 6.7 points to 81.9, with the August figure being revised downward to 88.6. Data collected from September 1 through September 23 underpinned this survey. Consumers expressed more pessimism regarding current economic conditions and the outlook over the next six months. This marked the third month in a row of decreasing overall confidence.
The Present Situation Index fell 7.9 points to 109.3 in September, reflecting consumer opinions on current business and labor market conditions. Meanwhile, the Expectations Index declined 5.9 points to 63.6, also representing its third consecutive monthly decrease. It gauges expectations for income, employment, and business conditions over the upcoming six months. The data indicates that concerns extend beyond present conditions, with households becoming increasingly negative about the economic prospects ahead.
During September, views on current business conditions weakened. About 18.5% of consumers described conditions as good, compared with 18.8% in August. Conversely, the percentage of those perceiving conditions as bad rose to 20.4% from 17.3%. Labor market assessments also took a downturn, with 23.6% stating jobs were plentiful, down from 24.5% in August. Additionally, 21.9% reported that jobs were hard to find, up from 20.3% one month earlier.
Inflation expectations rise amid gasoline price increases
Consumers’ expectations for inflation over the next year grew, with the average 12-month forecast increasing by 0.3 percentage points to 6.1%. The median expectation also climbed to 5.1%. Data from the U.S. Bureau of Labor Statistics showed consumer prices rose 3.4% in August compared to the previous year. The national average for regular gasoline reached nearly $4.46 per gallon on September 29, according to AAA. Gasoline prices surged 3.9% monthly, as reported by the BLS.
The survey also indicated a softening in consumers’ spending intentions across several major categories. Plans to purchase automobiles and homes over the next six months both declined on a six-month moving average. Expectations for spending on services such as hotels, movies, air travel, and amusement parks also decreased during September. Conversely, vacation plans increased; approximately 42.6% of consumers intended to travel within six months, up by 0.5 percentage points from August. This rise was driven by stronger intentions for domestic travel.
Outlooks for business, jobs, and income continue to weaken
Expectations surrounding business conditions, employment, and household income deteriorated further. Just 15.9% of consumers anticipated an improvement in business conditions, down from 17.0% in August, while the percentage expecting conditions to worsen increased to 25.4% from 23.3%. The outlook for job availability also declined, with only 14.0% expecting more jobs, whereas 28.4% predicted fewer opportunities. Income expectations softened, with 17.9% expecting income growth and 15.4% predicting a decline over the next six months.
The Conference Board also observed a decline in household financial confidence. Net assessments of current family finances turned negative for only the second time since this measure was introduced four years ago. Confidence waned across all age groups, using a six-month moving average. Nearly all income brackets also registered lower readings. Toluna conducts 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.
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