Following a not-so-rosy monthly report in August, nonprofit research firm The Conference Board’s Consumer Confidence Index, which measures American opinions of current economic conditions and their outlook for the next six months, wasn’t much better news in September, fell by 6.7 points to 81.9, down from 88.6 in August.
The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—retreated by 7.9 points to 109.3. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell by 5.9 points to 63.6, its third consecutive monthly decline. The survey period for this month’s preliminary results was September 1-23, which included a federal funds rate hike and ongoing geopolitical tensions.
With mortgage rates hitting a two-year high recently, consumers clearly are not at ease with the economy, while the Federal Reserve raised interest rates for the first time in over a year and may do so again soon to combat rising inflation
“The Consumer Confidence Index deteriorated notably in September, following two prior months of softening,” said Dana M Peterson, chief economist, The Conference Board. “The Present Situation Index fell sharply, while the Expectations Index slipped further into negative territory.
“Consumer appraisals of current business conditions became negative for the first time since September 2024. Perceptions of the current labor market also worsened, though remained within positive territory. Over the next six months, consumers expected both business conditions and the labor market to weaken. Consumers still anticipated their household incomes to rise, but less so compared to previous months.”
Peterson went on to explain that consumers’ write-in responses regarding factors affecting the economy were mostly pessimistic in September, with references to prices, the high cost of goods and services, and oil and gas prices in particular, rising to new heights, reflecting September’s surge in fuel costs.
“Comments about war/conflict eased this month but remained elevated,” he added. “Consumers also frequently cited politics, trade, and employment in their write-in responses, though to a lesser extent.”
The Present Situation Index worsened in September. Net views of current business conditions—the share saying conditions are “good” versus “bad”—declined by 3.4 percentage points to –1.9%. The fall was largely driven by more consumers reporting that business conditions are “bad.” Perceptions of current employment conditions also softened, with the labor market differential—the share of consumers saying jobs are “plentiful” minus the share saying jobs are “hard to get”—retreating by 2.5 ppts to just +1.7%.
Consumers’ net views of their Family’s Current Financial Situation turned negative in September, as the share of consumers who said their finances were “bad” rose to overtake those saying “good” for the second time since the question was introduced four years ago. Views of their Family’s Future Financial Situation over the next six months were somewhat less optimistic. The share of consumers who believed a US recession over the next 12 months is “somewhat likely” rose while those who believe recession is “not likely” declined.
