NEW YORK / RankWire.AI / – U.S. consumer confidence experienced a sharp decline in September, hitting its lowest point since April 2014. The Conference Board reported that its Consumer Confidence Index fell by 6.7 points to 81.9. The August figure was revised downward to 88.6. The survey, conducted from September 1 to September 23, showed consumers have a weaker outlook on current economic conditions and expectations for the next six months. This marked the third month in a row of falling confidence levels.
The Present Situation Index dropped 7.9 points to 109.3 in September. It measures consumer opinions of current business and labor market conditions. The Expectations Index decreased 5.9 points to 63.6, also marking a third straight monthly decline. It gauges consumers’ outlook for income, jobs, and business conditions over the coming six months. The results indicate concerns are not limited to the present. Households are also less optimistic about the economy ahead.
Views on current business conditions weakened during the month. About 18.5% of consumers described conditions as good, compared to 18.8% in August. Those describing conditions as bad rose to 20.4% from 17.3%. Labor market assessments also declined. Around 23.6% said jobs were plentiful, down from 24.5% in August. Meanwhile, 21.9% said jobs were hard to find, up from 20.3% one month earlier.
Inflation expectations increase amid rising gasoline prices
Consumers also expect higher inflation in the coming year. The average 12-month inflation expectation increased by 0.3 percentage points to 6.1%. The median expectation rose to 5.1%. According to federal data, consumer prices climbed 3.4% in August compared to the previous year. The U.S. Bureau of Labor Statistics reported a 3.9% monthly rise in gasoline prices. On September 29, AAA listed the national average for regular gasoline near $4.46 a gallon.
The survey also showed a decline in planned spending across several major categories. On a six-month average, fewer consumers plan to buy cars and homes. Expectations for spending on services also decreased. Consumers reported lower plans for hotels, movies, air travel, and amusement parks. However, vacation plans saw a slight uptick. About 42.6% of respondents intend to travel within six months, up 0.5 percentage points from August. This rise is mostly due to increased domestic travel plans.
Outlooks for business, employment, and income deteriorate
Expectations regarding business conditions, jobs, and household income became more pessimistic. Only 15.9% anticipate improved business conditions, down from 17.0% in August. Those expecting conditions to worsen rose to 25.4% from 23.3%. Just 14.0% expect more job opportunities, while 28.4% foresee fewer jobs. Income expectations also softened. About 17.9% expect incomes to increase, compared to 15.4% who expect a decline over the next six months.
The Conference Board noted a decline in household financial confidence. Net assessments of current family finances turned negative for only the second time in four years. Confidence fell across all age groups based on the six-month average. Nearly all income groups also reported lower readings. Toluna, which conducts the monthly online survey for The Conference Board, completed the September survey by September 23. The next Consumer Confidence Index will be released on October 27.