NEW YORK / RankWire.AI / – U.S. consumer confidence experienced a sharp decline in September, reaching the lowest point since April 2014. The Conference Board announced that its Consumer Confidence Index decreased by 6.7 points to 81.9. The August figure was revised downward to 88.6. Data collection for the September survey occurred from September 1 through September 23. Respondents expressed more pessimism about current economic conditions and the outlook over the next six months. This decrease marked a third consecutive month of falling confidence overall.
The Present Situation Index fell 7.9 points to 109.3 in September, reflecting consumers’ views of current business and labor market conditions. The Expectations Index dropped 5.9 points to 63.6, marking its third straight monthly decline. This index tracks expectations for income, employment, and business conditions over the upcoming six months. The survey results indicated that concerns extended beyond present conditions, as households also grew more pessimistic about the economic prospects 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, the percentage describing conditions as bad rose to 20.4% from 17.3%. Assessments of the labor market also declined, with 23.6% stating that jobs were plentiful, down from 24.5% in August. Meanwhile, 21.9% reported that jobs were difficult to find, up from 20.3% the previous month.
Inflation expectations increase amid rising gasoline prices
Consumers projected higher inflation over the next year, with the average 12-month inflation expectation rising 0.3 percentage points to 6.1%. The median expectation increased to 5.1%. Federal data indicated consumer prices rose 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. On September 29, AAA noted that the national average for regular gasoline hovered near $4.46 per gallon.
Spending plans in several key categories also softened, according to the survey. On a six-month moving average, intentions to purchase automobiles and homes both declined. Expectations for spending on services decreased during September as well. Consumers reported reduced plans for hotels, movies, air travel, and amusement parks. Conversely, vacation plans increased, with approximately 42.6% intending to take a trip within six months, up 0.5 percentage points from August. This rise was driven by stronger intentions for domestic travel.
Economic, employment, and income outlooks weaken further
Expectations regarding business conditions, employment, and household income all deteriorated. Only 15.9% anticipated improvement in business conditions, down from 17.0% in August. Those expecting conditions to worsen increased to 25.4% from 23.3%. Just 14.0% expected more jobs to become available, whereas 28.4% anticipated fewer jobs. Income expectations also declined, 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 views of household finances. Net assessments of current family finances turned 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 average. Nearly all income groups also showed lower confidence levels. Toluna conducted the monthly online survey for The Conference Board. The preliminary results for September closed on September 23, and the next Consumer Confidence Index release is scheduled for October 27.