The weakening mood among American consumers deepened in September. The latest report from The Conference Board shows that the consumer confidence index dropped by 3.6 points to 94.2, falling short of economists’ expectations for a more moderate decline. This marks the lowest level since April, a month notable for the sweeping tariff policies introduced by President Donald Trump, suggesting that the economic uncertainty triggered then still echoes in households across the U.S.Â
Consumer confidence is a key barometer of how people feel about their financial situation and the broader economy. The September data paints a picture of heightened anxiety, especially around job availability and inflation. The present situation index, which focuses on consumers’ views of current business and labor market conditions, plunged 7 points to 125.4, the steepest drop in a year. This decline reflects consumers’ growing unease with the economic realities they see today, including business conditions they regard as less favorable and a labor market that appears strained. The assessment of job availability has now fallen for nine consecutive months, reaching a new multi-year low, consistent with data showing fewer job openings in the market.
The expectations index, which measures consumers’ short-term outlook on income, business, and labor market prospects, also dropped to 73.4 in September, marking a sustained decline below the critical recession threshold of 80 that has held since February. This suggests that Americans are not just worried about their current circumstances but doubt the near-term economic outlook. Among these concerns, inflation stands out prominently. The number of consumers explicitly mentioning prices and inflation in their write-in survey responses rose in September, reclaiming its spot as the main driver behind consumer sentiment. While the average inflation expectations for the next 12 months eased slightly from 6.1% in August to 5.8% in September, they remain well above the 5% level seen at the end of 2024, keeping pressure on budgets.
Consumers’ worry about prices appears to affect their purchasing plans. Intentions to buy new or used cars declined in September, indicating that some are putting off big-ticket purchases under economic uncertainty. Conversely, the desire to buy homes increased to a four-month high, suggesting that for some, housing remains a priority or a safe investment despite broader economic concerns. Plans to purchase large appliances showed mixed signals depending on the item, with TVs and dryers seeing rises in buying intentions, while refrigerators declined. Meanwhile, intentions to buy services, especially those related to travel, continued to weaken as vacation plans fell to their lowest level since April.
The September report also reveals interesting demographic and political nuances. Confidence rose among younger consumers under 35 but declined for those over 35, showing differing perceptions of the economy across age groups. Confidence shifts by income were mixed with no clear pattern, except that households in the $25,000 to $35,000 range and those making over $200,000 still lag behind, compared to other groups. Politically, confidence inched up slightly among Republicans and Democrats, while Independents experienced a notable drop, reflecting perhaps the divided views on economic management.
Looking to consumers’ family finances, both current financial situations and expected future finances weakened in September. The share of people who think a recession is very likely in the next year rose slightly to the highest levels since May, and more Americans believe the U.S. is already in recession, highlighting the growing economic apprehension across the country.
Taken together, the latest consumer confidence figures suggest a cooling economy where inflation and job market worries cloud Americans’ outlook. Although some see bright spots like increased optimism about future income and a strong housing market, the overall mood is cautious. Businesses and policymakers alike will be watching these trends carefully as they plan for the months ahead, hoping to balance growth with inflation control and labor market stability.
