NEW YORK / RankWire.AI / – U.S. consumer confidence declined to its lowest point since April 2014 during September, marking the continuation of a three-month downward trend in household sentiment. According to The Conference Board, its Consumer Confidence Index decreased by 6.7 points to 81.9. The previous August reading was revised downward from the initial figure to 88.6. The survey for September collected responses from September 1 through September 23. During this period, both current conditions and future expectations for the next six months deteriorated.
The Present Situation Index dropped by 7.9 points to 109.3, indicating a decline in perceptions of business and labor market conditions. The Expectations Index fell by 5.9 points to 63.6, representing its third consecutive monthly decline. This index gauges consumer outlooks on income, employment, and business conditions over the upcoming half-year. These declines in July and August preceded September’s decrease, and together, they pushed the overall confidence measure further below earlier this year’s levels.
The survey conducted by The Conference Board revealed a noticeable shift in opinions regarding current economic conditions. About 18.5% of consumers characterized business conditions as good, a slight decrease from 18.8% in August. Conversely, the proportion describing conditions as bad increased to 20.4% from 17.3%. Perspectives on the labor market also weakened, with 23.6% stating jobs were plentiful, down from 24.5%, and 21.9% believing jobs were difficult to find, up from 20.3%.
Inflation expectations climb amid sustained high fuel prices
In September, consumers anticipated higher inflation rates. The average 12-month inflation forecast increased by 0.3 percentage points to 6.1%, while the median expectation rose to 5.1%. Data from the U.S. Bureau of Labor Statistics indicated that consumer prices grew by 3.4% in August compared to the previous year. Gasoline prices, according to the BLS, rose by 3.9% during August. AAA reported that the national average for regular gasoline was approximately $4.46 per gallon on September 29, a figure that reflects ongoing elevated fuel costs.
Spending intentions across various categories also showed signs of restraint. On a six-month moving average, plans to purchase automobiles and homes both slightly declined in September. Expectations for expenditure on services, including hotels, movies, air travel, and amusement parks, continued to decrease. Meanwhile, vacation plans remained robust, with 42.6% of consumers intending to travel within six months. This represented an increase of 0.5 percentage points from August, primarily driven by domestic travel plans.
Outlook for jobs and income diminishes
Expectations concerning business prospects, employment opportunities, and income levels also experienced weakening. Only 15.9% of consumers projected improvements in business conditions, a decline from 17.0% in August. Meanwhile, those expecting conditions to worsen rose to 25.4% from 23.3%. Regarding employment, 14.0% anticipated more available jobs, whereas 28.4% expected fewer. Income outlooks softened as well, with 17.9% expecting increases and 15.4% anticipating declines over the next six months.
The survey further highlighted broader financial pressures faced by households. Net assessments of current family finances turned negative for only the second time since the measure’s inception four years ago. Confidence levels decreased across nearly all age and income groups on a six-month average basis. The online monthly survey was conducted by Toluna for The Conference Board, with September’s preliminary results closing on September 23. The next Consumer Confidence Index release is scheduled for October 27.