NEW YORK / RankWire.AI / – U.S. consumer confidence reached its lowest point since April 2014 in September, marking a continuation of a three-month downward trend in household sentiment. The Conference Board announced that its Consumer Confidence Index decreased by 6.7 points, settling at 81.9. August’s figure was adjusted downward to 88.6. The survey for September was conducted from September 1 through September 23, and during this period, both current conditions and future expectations for the next six months deteriorated.
The Present Situation Index declined by 7.9 points to 109.3, indicating a more cautious outlook on business and employment conditions. Meanwhile, the Expectations Index dropped 5.9 points to 63.6, marking the third consecutive month of decline. This index gauges consumer opinions on income, business prospects, and employment over the upcoming six months. The declines in July and August were followed by the September decrease, contributing to the overall confidence index falling further below earlier this year’s levels.
The survey conducted by The Conference Board revealed a distinct shift in perceptions of the current business environment. About 18.5% of consumers rated conditions as good, a slight decrease from 18.8% in August. Conversely, the percentage describing conditions as bad increased to 20.4% from 17.3%. Views on the labor market also softened, with 23.6% stating jobs were plentiful, down from 24.5%, and 21.9% indicating jobs were hard to find, up from 20.3%.
Inflation outlook rises amid persistent fuel prices
Inflation expectations among consumers increased in September. The average 12-month inflation forecast rose by 0.3 percentage points to 6.1%, while the median estimate climbed to 5.1%. Separate data from the federal government showed consumer prices increased by 3.4% in August compared to the previous year. The U.S. Bureau of Labor Statistics reported that gasoline prices went up by 3.9% during August. Additionally, AAA indicated that the national average for regular gasoline on September 29 was approximately $4.46 per gallon.
Spending intentions also indicated moderation across various categories. On a six-month moving basis, plans to purchase automobiles and homes edged downward in September. Expectations for spending on services, including hotels, movies, air travel, and amusement parks, continued to decline. However, travel plans within six months remained relatively strong, with 42.6% of consumers intending to take a trip. This was a 0.5 percentage point increase from August, primarily driven by domestic travel increases.
Expectations for jobs and income diminish
Outlook for business conditions, employment, and income also deteriorated. Just 15.9% of consumers believed business conditions would improve, compared to 17.0% in August. Those expecting conditions to worsen rose to 25.4% from 23.3%. The proportion expecting more jobs to be available declined to 14.0%, while those anticipating fewer jobs increased to 28.4%. Income forecasts also softened, with 17.9% expecting gains and 15.4% expecting declines over the next six months.
Household finances showed signs of strain, with net views of current family financial situations turning negative for only the second time since the measure’s inception four years ago. Confidence levels declined across nearly all age and income groups based on the six-month moving average. The online monthly survey, conducted by Toluna for The Conference Board, concluded its preliminary September results on September 23. The next Consumer Confidence Index release is scheduled for October 27.