The Conference Board’s Consumer Confidence Index fell 6.7 points to 81.9 in September, its lowest reading since April 2014, as respondents reported pressure from prices, household finances and jobs. For the first time in the four-year history of that survey question, more respondents described their personal finances as bad rather than good.
Household Finances Under Pressure
The Conference Board’s Present Situation Index dropped 7.9 points to 109.3. Its Expectations Index, which measures the six-month outlook, fell 5.9 points to 63.6. The overall index stood at 88.6 in August, below the Dow Jones consensus forecast of 89.
The University of Michigan’s consumer survey also showed a decline. Sentiment fell 7% in September to its second-lowest reading on record.
Responses collected from September 1-23 often mentioned the cost of gas, goods and services. Average inflation expectations rose 0.3 percentage points from August to 6.1%, while the median expectation climbed 0.3 points to 5.1%.
“The Consumer Confidence Index deteriorated notably in September, following two prior months of softening,” said Dana Peterson, the Conference Board’s chief economist. Peterson said consumers’ 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,” Peterson 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.”
Regular gasoline averaged $4.46 a gallon. Prices for appliances, car repairs and wireless phone service also rose in August. The government reported that the consumer price index rose 3.4% in August from a year earlier, matching July’s annual rate. It increased 0.4% from July, four times the previous month’s 0.1% rise.
Wages, Jobs and Borrowing Costs
Prices remained high after five years of elevated inflation, while wage growth stayed weak. Average hourly wages rose 3.1% from a year earlier, the weakest annual increase since May 2021. Respondents generally expected household incomes to rise, though not by as much as 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%. The Conference Board said consumers’ view of the labor market worsened in September but remained positive.
U.S. employers added 162,000 jobs in August, ending a summer of weak hiring, and unemployment remained at 4.1%. Some of that low unemployment rate may reflect people who gave up their job searches in previous months. A separate Bureau of Labor Statistics report found that job openings edged down by 256,000 in August to 7.08 million, with sharp declines in professional and business services and health care-related jobs. The Wall Street consensus had called for 7.2 million openings. Hires edged higher, quits changed little and layoffs fell slightly.
Two weeks before the reports, the Federal Reserve raised its benchmark interest rate for the first time since 2023 to curb 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.
Inflation and the Policy Response
The Conference Board’s findings came amid uncertainty over the Iran war, as Treasury yields and mortgage rates rose. The Federal Reserve’s preferred inflation measure, the personal consumption expenditures price index, was up 3.7% in June from a year earlier, down from May’s 4.1% annual increase 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.
The government reported that gas prices spiked as fighting continued in the Middle East. President Donald Trump continued to blame high prices on his predecessor, Democrat Joe Biden. The government was scheduled to issue its September jobs report Friday.