Consumer confidence index falls to 81.9 in September
The Conference Board's consumer confidence index plunged to 81.9 in September, its lowest level since 2014, driven by surging inflation.
The Conference Board's consumer confidence index fell sharply to 81.9 in September, a 6.7-point drop from the prior month. This marks the lowest reading in twelve years, since 2014, and came in well below economist forecasts.
Business conditions turn negative
Consumer appraisals of current business conditions became negative for the first time in a year. The Present Situation Index fell 7.9 points to 109.3, its lowest level since 2021. More respondents said personal finances were bad than good for the first time in four years.
Inflation expectations climb
One-year inflation expectations moved higher, adding to persistent price pressures. The average expectation rose to 6.1%, while the median climbed to 5.1%. Both figures increased by 0.3 percentage points from August.
Labor market sentiment weakens
The labor market outlook deteriorated significantly. The jobs differential-the gap between those saying jobs are plentiful and those saying jobs are hard to get-shrank to 1.7%, down 2.5 percentage points. This is the lowest differential since 2021. The share of consumers expecting wage increases in the next six months slid to its lowest point this year, while the proportion anticipating a drop in wages increased.
| Measure | September Reading | Change from August |
|---|---|---|
| Headline Consumer Confidence Index | 81.9 | -6.7 points |
| Present Situation Index | 109.3 | -7.9 points |
| Expectations Index | 63.6 | -5.9 points |
| Average 1-Year Inflation Expectation | 6.1% | +0.3 points |
| Median 1-Year Inflation Expectation | 5.1% | +0.3 points |
| Jobs Differential ('Plentiful' vs. 'Hard to Get') | 1.7% | -2.5 points |
Energy prices drive cost concerns
Spiking energy costs fueled broader inflation worries. US gasoline prices averaged $4.45 per gallon, a sharp increase from $3.13 a year ago. Diesel prices hovered near all-time highs, and heating oil prices jumped ahead of winter. Dana Peterson, The Conference Board's chief economist, stated that references to prices, the high cost of goods and services, and oil and gas prices rose to new heights in September.
The outlook for the next six months slipped to a level not seen in over a year. Consumers expected both business conditions and the labor market to weaken. The proportion intending to purchase cars, homes, or major appliances decreased. Economists noted that higher energy prices add inflationary pressure and that renewed pressure on real incomes poses a headwind to growth. With the Expectations Index at 63.6, the weakening in confidence is expected to dampen spending and slow economic growth in the coming months.
