Consumer confidence has hit a record low in September, marking its weakest point since 2014. As reported by the Conference Board, this decline has been attributed to increasing inflation concerns and a less optimistic view of the labor market.
The Consumer Confidence Index experienced a significant drop, decreasing by 6.7 points to a total of 81.9, which was notably below analysts’ expectations of 89, according to the Dow Jones consensus forecast. Respondents of the survey expressed heightened apprehension regarding inflation rates as well as the current job market.
In a notable shift, more individuals reported their personal financial situations as “bad” rather than “good” for the first time in the four-year history of this survey question. Dana Peterson, the chief economist at the Conference Board, remarked, “Consumer appraisals of current business conditions became negative for the first time since September 2024.”
Peterson added that pessimistic sentiments among respondents were prominent in their feedback. Many cited increasing prices, particularly for essential goods and services such as oil and gas, as major concerns. This surge in fuel costs has significantly influenced their outlook.
Key Indexes Reflect Deterioration
Additional metrics from the Conference Board illustrate a similar trend. The Present Situation Index saw a drop of 7.9 points to a level of 109.3, while the Expectations Index, which gauges sentiment over a six-month horizon, fell by 5.9 points to 63.6.
Labor Market Insights
The labor market continues to show signs of strain, with the gap between respondents indicating that jobs are “plentiful” versus those who deem them “hard to get” decreasing further. This key labor market indicator slipped by 2.5 percentage points, settling at just 1.7%.
This decline in consumer sentiment is further compounded by soaring inflation expectations tied to ongoing uncertainties stemming from geopolitical events, such as the conflict in Iran. These events have been reflected in rising Treasury yields and escalating mortgage rates.
Inflation Expectations Rise
On average, survey participants anticipate an inflation rate of 6.1%, an increase of 0.3 percentage points from the previous month. The median expectations also rose by this same margin, now standing at 5.1%.
The findings from the Conference Board align with results from similar surveys, including the University of Michigan’s consumer sentiment survey, which reported a 7% decrease in sentiment, resulting in the second-lowest reading on record for September.
Job Openings Decline
In related economic news, job openings for August decreased to 7.08 million, a decline of 256,000. This reduction was primarily seen in sectors such as professional and business services, as well as healthcare. This figure was slightly below the Wall Street forecast of 7.2 million job openings.
Despite the decline in job openings, there was a noted increase in the number of hires, with the rates of voluntary resignations remaining stable and layoffs showing a slight reduction.
