The Conference Board Consumer Confidence Index tumbled 6.7 points to 81.9 in September, down from 88.6 in August.
The Present Situation Index, based on consumer assessments of current business and labor market conditions and the more buoyant of the two basic index readings, fell by 7.9 points to 109.3 from August. The Expectations Index, based on consumer assessment on income, business and labor market conditions six months out, fell by 5.9 points to 63.6, its third consecutive monthly decline. The break-even point between positive and negative sentiments is 100.
On a six-month moving average basis, plans to purchase autos and homes both declined slightly in September. Among durable goods, furniture and smartphones remained the top categories consumers plan to purchase over the next six months. Planned spending on refrigerators and television sets fell the most on a six-month moving average basis, while plans for other durable goods moderated slightly, the Conference Board stated.
The decline in the Present Situation Index largely resulted from more consumers characterizing business conditions as bad. Perceptions of current employment conditions also softened.
In a September Conference Board poll, 18.5% of consumers said business conditions were good, down from 18.8% in August, while 20.4% said business conditions were bad, up from 17.3%. On labor, 23.6% of consumers said jobs were plentiful, down from 24.5% in August, while 21.9% said jobs were hard to get, up from 20.3% month over month.
All three components of the Expectations Index deteriorated in September, with net expectations for business conditions, the labor market, and household income all retreating. In the month, 15.9% of consumers expected business conditions to improve, down from 17% in August, while 25.4% expected business conditions to worsen, up from 23.3%. On labor, 14% of consumers expected more jobs to be available, down from 14.8% in August, while 28.4% expected fewer open jobs, up from 26.1% month over month.
As they assessed prospects six months out, 17.9% of consumers expected their incomes to increase, down from 19% in August; and 15.4% expected their incomes to decline, up from 13.5%. month over month.
On a six-month moving average basis, confidence across all age groups and virtually all income groups trended downward. Higher-income groups with household incomes from $125,000 to $149,000 remained more optimistic overall, but they reported the greatest decline in confidence readings over the preceding six months. By generation, confidence among Gen Z and Millennials remained highest on a six-month moving-average basis. Confidence among the three oldest generations represented — Gen Xers, Baby Boomers and the Silent Generation —continued to weaken.
Consumers’ average and median 12-month inflation expectations rose 0.3 percentage points in September to 6.1% and 5.1%, respectively, according to the Conference Board. The share of consumers expecting higher interest rates over the next 12 months jumped 5.2 percentage points to 68.4%. Although consumers still expect stock prices to rise over the next 12 months, optimism moderated in September.
Consumers’ net views of their “Family’s Current Financial Situation” turned negative in September, with the share of consumers who said their finances were bad rising to overtake those who said they were good for the second time since the Conference Board introduced the question four years ago. Views of “Family’s Future Financial Situation” over the next six months came in less optimistic. The share of consumers who believed a recession in the United States over the next 12 months is somewhat likely rose, while those who believed a recession is not likely declined.
Anticipated spending on services over the next six months slipped back again in September. The top five services spending categories, by consumer expectations, were restaurants/bars/take-out, streaming/internet/mobile services, beauty and personal care, utilities, and healthcare. Beyond the top five, consumers focused spending on cheap thrills and necessities, the Conference Board pointed out. Spending intentions for many discretionary activities moderated in September, including hotels for personal travel, movies, airfare and amusement parks. Household maintenance, financial services and historical sites/museums enjoyed minor increases in planned spending.
Despite the pullback in planned services spending, vacation plans held up, with 42.6% of consumers intending to take a vacation in the next six months, up 0.5 percentage points from August. The month-over-month increase was limited to domestic travel, as planned trips to countries outside of the United States dipped in September.
“The Consumer Confidence Index deteriorated notably in September, following two prior months of softening,” said Dana Peterson, Conference Board chief economist. “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 added, “Consumers’ write-in responses regarding factors affecting the economy were mostly pessimistic in September. References to prices, the high cost of goods and services, and oil and gas prices in particular, rose to new heights, reflecting September’s surge in fuel costs. Comments about war/conflict eased this month but remained elevated. Consumers also frequently cited politics, trade and employment in their write-in responses, though to a lesser extent.”
