The Conference Board's Consumer Confidence Index fell 6.7 points to 81.9 in September, its lowest reading since April 2014. Americans told the survey they’re worried about prices, household finances and jobs. August's reading was 88.6, and economists polled by Dow Jones had expected 89.
The University of Michigan's consumer survey tells the same story. Its sentiment measure fell 7% in September, to its second-lowest reading on record.
Households Feeling the Squeeze
For the first time in the history of one survey question, more respondents described their personal finances as bad rather than good. That's a striking break. The Conference Board's Present Situation Index dropped 7.9 points to 109.3, and its Expectations Index, a six-month outlook measure, fell 5.9 points to 63.6.
The pressure shows up in the numbers behind the mood. Regular gasoline averaged $4.46 a gallon. Appliance, car-repair and wireless-phone-service prices also rose in August. The Labor Department said Friday that the consumer price index climbed 3.4% in August from a year earlier, matching July's annual rate. Month over month, prices rose 0.4%, four times July's 0.1% increase.
Paychecks aren't keeping up. Average hourly wages rose 3.1% from a year earlier, the weakest annual increase since May 2021.
"Consumers' write-in responses regarding factors affecting the economy were mostly pessimistic in September," said Dana Peterson, the Conference Board's chief economist. "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." Peterson added that consumers' assessments of current business conditions turned negative for the first time since September 2024.
Respondents' average inflation expectation rose 0.3 percentage points from August to 6.1%. The median expectation also increased 0.3 points, to 5.1%. Researchers collected survey responses from September 1-23.
A Softer Job Market, Higher Borrowing Costs
The labor market offers little cushion. U.S. employers added 162,000 jobs in August, ending a summer of weak hiring, and unemployment held at 4.1%. Some of that low rate could reflect people giving up their job searches in previous months. The gap between respondents saying jobs were "plentiful" and those saying they were "hard to get" narrowed by 2.5 percentage points to 1.7%.
A separate Bureau of Labor Statistics report showed job openings edged down by 256,000 in August to 7.08 million. Wall Street had expected 7.2 million. Professional and business services and health care-related jobs saw sharp declines. Hires edged higher, quits were little changed and layoffs fell slightly.
The Federal Reserve, meanwhile, raised its benchmark interest rate two weeks before the reports. It was the first increase since 2023, aimed at curbing stubborn inflation. The quarter-point move lifted the key rate to about 3.9%, and the central bank signaled another increase could come later in the year. The move could eventually raise borrowing costs for mortgages, auto loans and credit cards, debts many families rely on to get by. Uncertainty over the Iran war already showed up in rising Treasury yields and mortgage rates.
The Political Argument Over Blame
President Donald Trump continued to blame high prices on his predecessor, Democrat Joe Biden. The Conference Board's findings came as inflation had risen since Trump's inauguration in January 2025. The Federal Reserve's preferred gauge, the personal consumption expenditures price index, stood at 2.5% when Trump was inaugurated. It read 2.8% before the Iran war began on Feb. 28. It was up 3.7% in June from a year earlier, down from May's 4.1% but well above both earlier readings.
The government planned to release August PCE data Wednesday and the September jobs report Friday.
Why This Matters: Confidence surveys are more than mood checks. They capture how families feel about rent, groceries, gas and debt, and this month's readings are grim. Wages rose 3.1% while consumer prices rose 3.4%, so many households are watching their budgets tighten. A Fed rate increase, and the prospect of another, could make credit more expensive for those who can least absorb it. Weaker hiring adds to the strain. The data raises a question for policymakers in Washington about how to protect working families from fuel-price shocks and rising costs while the central bank fights inflation. Public institutions have tools for that, and families are waiting to see whether they’ll be used.