For the first time in the four-year history of a Conference Board survey question, more people described their personal finances as bad than good. The same September survey found consumer confidence plunged 6.7 points to 81.9, its lowest reading since April 2014, as households reported pressure from prices, finances and jobs.
Households absorb the squeeze
The Conference Board’s index fell from 88.6 in August, landing below the Dow Jones consensus forecast of 89. The University of Michigan’s consumer survey pointed in the same direction: sentiment dropped 7% in September to its second-lowest reading on record.
The Conference Board’s Present Situation Index lost 7.9 points, reaching 109.3. Its Expectations Index, which measures the six-month outlook, slipped 5.9 points to 63.6. These measures put the cost of living and economic uncertainty into ordinary people’s daily calculations, while institutions far from household control make decisions about interest rates and national economic policy.
The gap between respondents who said jobs were “plentiful” and those who said they were “hard to get” narrowed by 2.5 percentage points to 1.7%. The board said consumers’ assessment of the labor market worsened in September, though it remained positive. Respondents generally expected household incomes to rise, but less than they had in previous months.
Survey responses gathered from September 1-23 often mentioned gas, goods and services. Average inflation expectations climbed 0.3 percentage points from August to 6.1%; the median expectation also rose 0.3 points, to 5.1%. Regular gasoline averaged $4.46 a gallon, while appliance, car-repair and wireless-phone-service prices rose in August.
The apparatus answers with higher rates
The Federal Reserve raised its benchmark interest rate two weeks before the reports, its first increase since 2023, to curb stubborn inflation. The quarter-point move brought the Fed’s key rate to about 3.9%, and the central bank signaled it could raise rates again later in the year. The move could eventually increase borrowing costs for mortgages, auto loans and credit cards—the kinds of bills households can’t simply opt out of.
The government reported consumer inflation accelerated in August, while gas prices spiked as fighting in the Middle East continued. The consumer price index rose 3.4% from a year earlier, matching July’s annual rate. From July to August, it rose 0.4%, four times the previous month’s 0.1% increase.
The Federal Reserve’s preferred inflation measure, the personal consumption expenditures price index, rose 3.7% in June from a year earlier, down from May’s 4.1% but above the 2.8% reading before the Iran war began on Feb. 28. It stood at 2.5% when President Donald Trump was inaugurated in January 2025. The government was scheduled to release August PCE data Wednesday.
Jobs and blame don’t pay the bills
U.S. employers added 162,000 jobs in August, ending a summer of weak hiring, and unemployment held at 4.1%. The report cautioned that some of the low unemployment rate could reflect people giving up their job searches in previous months. Average hourly wages increased 3.1% from a year earlier, the weakest annual increase since May 2021. The government was scheduled to issue its September jobs report Friday.
A Bureau of Labor Statistics report showed job openings slipped by 256,000 in August to 7.08 million, below the Wall Street consensus of 7.2 million. Openings dropped sharply in professional and business services and health care-related jobs. Hires edged higher, quits changed little and layoffs fell slightly.
The Conference Board’s chief economist, Dana Peterson, said assessments of current business conditions turned negative for the first time since September 2024. “Consumers’ write-in responses regarding factors affecting the economy were mostly pessimistic in September,” she said. “References to prices, the high cost of goods and services, and oil and gas prices in particular, rose to new heights, reflecting September’s surge in fuel costs.”
Confidence stayed under pressure after five years of elevated inflation, with prices still high and wage growth weak. Inflation had risen since President Donald Trump’s inauguration in January 2025. Trump continued to blame high prices on his predecessor, Democrat Joe Biden. The blame shifts between presidents; households still face the prices, wages and borrowing costs.