Key facts
- US consumer confidence fell to 81.9 in September, the lowest since 2014.
- The Conference Board's consumer confidence index dropped 6.7 points from 88.6 in August.
- Consumers' views on current business conditions turned negative for the first time since September 2024.
- Perceptions of the current labor market also worsened but remained positive.
- Consumers expect both business conditions and the labor market to weaken over the next six months.
- Average and median 12-month inflation expectations rose to 6.1% and 5.1% respectively.
US consumer confidence plummeted to its lowest point in over 12 years in September, signaling growing pessimism among households about the economy's future. The Conference Board reported that its consumer confidence index fell by 6.7 points to 81.9, a level not seen since 2014. This decline was sharper than the 89.2 forecast by economists polled by Reuters.
Both consumers' assessment of current business conditions and their expectations for the future deteriorated. The Present Situation Index, which gauges views on current business and labor market conditions, dropped 7.9 points to 109.3. For the first time since September 2024, consumers' appraisals of current business conditions turned negative. While perceptions of the labor market also worsened, they remained in positive territory.
The Expectations Index, reflecting consumers' short-term outlook for income, business, and labor markets, declined by 5.9 points to 63.6, marking its third consecutive monthly decrease. Consumers anticipate both business conditions and the labor market to weaken in the coming six months. Despite this, they still expect their household incomes to rise, albeit at a slower pace than in previous months. Inflation expectations also rose, with average and median 12-month expectations reaching 6.1% and 5.1% respectively, and a significant majority anticipating higher interest rates over the next year.