NEW YORK / RankWire.AI / – U.S. consumer confidence fell to its lowest level since April 2014 in September, extending a three-month decline in household sentiment. The Conference Board said its Consumer Confidence Index dropped 6.7 points to 81.9. August’s reading was revised down to 88.6. The September survey covered responses gathered from September 1 through September 23. Both assessments of current conditions and expectations for the next six months weakened during the month.
The Present Situation Index fell 7.9 points to 109.3, reflecting weaker views of business and labor conditions. The Expectations Index declined 5.9 points to 63.6, its third straight monthly drop. That gauge measures views on income, business conditions and employment over the next six months. The September fall followed declines in July and August. The two measures together pushed the overall confidence index further below levels recorded earlier this year.
The Conference Board survey showed a clear shift in views of current business conditions. About 18.5% of consumers called conditions good, down from 18.8% in August. The share describing conditions as bad rose to 20.4% from 17.3%. Labor market views also weakened. Some 23.6% said jobs were plentiful, down from 24.5%, while 21.9% said jobs were hard to get, up from 20.3%.
Inflation expectations rise as fuel costs stay elevated
Consumers also reported higher inflation expectations in September. Average 12-month inflation expectations rose 0.3 percentage point to 6.1%, while the median climbed to 5.1%. Separate federal data showed consumer prices rose 3.4% in August from a year earlier. The U.S. Bureau of Labor Statistics said gasoline prices increased 3.9% during August. AAA reported a national average of about $4.46 a gallon for regular gasoline on September 29.
Planned spending also showed signs of restraint in several categories. On a six-month moving average, plans to buy automobiles and homes both edged lower in September. Expected spending on services declined again, including planned outlays for hotels, movies, air travel and amusement parks. Vacation plans were firmer, with 42.6% of consumers planning a trip within six months. That share rose 0.5 percentage point from August, with the increase limited to domestic travel.
Labor and income expectations weaken
Expectations for business, jobs and incomes also weakened. Only 15.9% of consumers expected business conditions to improve, down from 17.0% in August. The share expecting conditions to worsen rose to 25.4% from 23.3%. Some 14.0% expected more jobs to become available, while 28.4% expected fewer jobs. Income expectations also softened, with 17.9% expecting gains and 15.4% expecting declines over the next six months.
The survey also showed broader pressure across household finances. Net views of current family finances turned negative for only the second time since the measure began four years ago. Confidence trended lower across all age groups and nearly all income groups on a six-month moving average. Toluna conducts the online monthly survey for The Conference Board, with September’s preliminary results closed on September 23. The next Consumer Confidence Index release is scheduled for October 27.