NEW YORK / RankWire.AI / – U.S. consumer confidence experienced a sharp decline in September, reaching its lowest level since April 2014, according to The Conference Board. The Consumer Confidence Index decreased by 6.7 points to 81.9, with the August figure revised downward to 88.6. The survey, conducted from September 1 through September 23, indicated that consumers had a more pessimistic view of current economic conditions and the outlook for the next six months. This marked the third consecutive month of decline in overall confidence.
In September, the Present Situation Index dropped 7.9 points to 109.3, reflecting consumers’ perceptions of the current business and labor markets. Meanwhile, the Expectations Index fell 5.9 points to 63.6, marking a third month of decline, and it gauges expectations regarding income, employment, and business conditions over the coming six months. The results suggest that concerns extended beyond current circumstances, with households becoming less optimistic about the economic environment ahead.
During the month, views on current business conditions softened, with only 18.5% describing conditions as good compared to 18.8% in August. Conversely, the percentage calling conditions bad increased to 20.4% from 17.3%. Assessments of the labor market also declined, as 23.6% reported plentiful jobs, down from 24.5% in August, while 21.9% said jobs were hard to find, up from 20.3% a month earlier.
Inflation expectations rise amid gasoline price increases
Consumers’ outlook for inflation over the next year also grew more pessimistic, with average 12-month expectations rising 0.3 percentage points to 6.1%, and the median increasing to 5.1%. The U.S. Bureau of Labor Statistics reported a 3.4% rise in consumer prices in August from a year earlier, and gasoline prices surged 3.9% month-over-month, according to the same source. AAA reported that the national average price for regular gasoline was near $4.46 per gallon on September 29.
In addition, consumers’ spending plans for key categories showed a slowdown. On a six-month moving average, intentions to purchase automobiles and homes both decreased, and expectations for spending on services such as hotels, movies, air travel, and amusement parks also fell. Conversely, vacation plans increased, with about 42.6% intending to travel within six months, up 0.5 percentage points from August, driven mainly by stronger domestic travel plans.
Outlooks on business, jobs, and income weaken further
Expectations regarding business conditions, employment, and household income further deteriorated, with only 15.9% anticipating improvements in business conditions compared to 17.0% in August. The share expecting conditions to worsen rose to 25.4% from 23.3%. Expectations for job availability also declined, with only 14.0% predicting more jobs and 28.4% expecting fewer. Income forecasts showed a similar trend, with 17.9% expecting an increase and 15.4% predicting a decrease over the next six months.
The Conference Board also observed a decline in confidence regarding household finances. Net assessments of current family finances turned negative for only the second time since that measure began four years ago. Confidence levels fell across all age groups on a six-month moving average, and nearly all income brackets also recorded lower scores. Toluna conducts the monthly online survey for The Conference Board. The preliminary results for September closed on September 23, with the next Consumer Confidence Index scheduled for release on October 27.