NEW YORK / RankWire.AI / – U.S. consumer confidence experienced a sharp downturn in September, falling to its lowest level since April 2014, according to the Conference Board, which reported that its Consumer Confidence Index decreased by 6.7 points to 81.9. The previous August figure was revised downward to 88.6, and the survey, conducted from September 1 through September 23, revealed that consumers held more negative views of both current economic conditions and the outlook for the next six months. This marked the third consecutive month in which overall confidence declined.
The Present Situation Index, reflecting consumer perceptions of immediate business and employment conditions, dropped 7.9 points to 109.3 in September. Meanwhile, the Expectations Index, which gauges outlooks on income, employment, and business prospects over the upcoming half-year, fell 5.9 points to 63.6, marking a third consecutive month of decline. These figures indicate that consumer concerns are extending beyond present circumstances, with households becoming increasingly pessimistic about the economic environment in the near future.
During September, perceptions of current business conditions deteriorated slightly, with only 18.5% of consumers describing conditions as good, compared to 18.8% in August, while those rating conditions as bad increased to 20.4% from 17.3%. Assessments of the labor market also moved downward, as 23.6% of respondents reported that jobs were plentiful, down from 24.5% in August, whereas 21.9% indicated that jobs were hard to find, compared with 20.3% the previous month.
Rising gasoline prices lead to increased inflation expectations
In addition to concerns about the economy, consumers projected higher inflation over the coming year, with the average 12-month inflation expectation rising by 0.3 percentage points to 6.1%. The median expectation also increased to 5.1%. Data from the U.S. Bureau of Labor Statistics showed consumer prices climbed 3.4% in August compared to the same period last year, while the national average for regular gasoline was approximately $4.46 per gallon on September 29, according to AAA, which also reported a 3.9% monthly rise in gasoline prices.
The survey further indicated a slowdown in consumers’ spending intentions across several major sectors. On a six-month moving average basis, plans to purchase vehicles and homes decreased, and expectations for spending on services, such as hotels, movies, air travel, and amusement parks, also diminished during September. Conversely, vacation plans showed an upward trend, with about 42.6% of consumers intending to travel within six months, an increase of 0.5 percentage points from August, driven mainly by stronger domestic travel plans.
Outlooks for business, employment, and household income weaken further
Expectations surrounding business prospects, job availability, and household income took a hit, with only 15.9% of consumers expecting business conditions to improve, down from 17.0% in August, and those anticipating worsening conditions rising to 25.4% from 23.3%. Additionally, just 14.0% expected more jobs to become available, while 28.4% anticipated fewer jobs, and income outlooks also softened as 17.9% of respondents projected income increases, compared with 15.4% expecting income declines over the next six months.
The Conference Board also observed a decline in confidence regarding household finances, with net assessments of current family financial situations turning negative for only the second time since this measure was introduced four years ago. Confidence levels fell across all age groups on a six-month moving average, and nearly every income category experienced lower readings. Toluna, which conducts the monthly online survey for The Conference Board, concluded that the preliminary September results were collected by September 23, with the next Consumer Confidence Index release scheduled for October 27.