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The Conference Board Consumer Confidence Index fell by 6.7 points to 81.9 in September, down from 88.6 in August. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell by 7.9 points to 109.3. The Expectations Index—based on consumers’ short-term outlook for income, business and labor market conditions—fell by 5.9 points to 63.6, its third consecutive monthly decline. The survey period for this month’s preliminary results was September 1-23, which included a federal funds rate hike and ongoing geopolitical tensions.
“The Consumer Confidence Index deteriorated notably in September, following two prior months of softening,” says Dana M Peterson, chief economist, The Conference Board. “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.”
The Present Situation Index worsened in September. Net views of current business conditions—the share saying conditions are “good” versus “bad”—declined by 3.4 percentage points to –1.9%. The fall was largely driven by more consumers reporting that business conditions are “bad.” Perceptions of current employment conditions also softened, with the labor market differential—the share of consumers saying jobs are “plentiful” minus the share saying jobs are “hard to get”—retreating by 2.5 ppts to just +1.7%.
The Expectations Index also declined in September. All three of its components deteriorated, with net expectations for business conditions dipping by 3.2 ppts to –9.5%. Net expectations for the labor market also became more pessimistic, declining by 3.1 ppts to –14.4%. Net expectations for household income fell by 3.0 ppts but remained in positive territory at +2.5%.
On a six-month moving average basis, confidence across all age groups and nearly all income groups trended downward. While higher-income groups remained generally more optimistic, those with a household income of $125,000-$149,000 reported the greatest decline in confidence over the last six months.
Consumers’ average and median 12-month inflation expectations rose 0.3 ppts in September to 6.1% and 5.1% respectively. The share of consumers anticipating higher interest rates over the next 12 months jumped by 5.2 ppts to 68.4%. Consumers still largely expected stock prices to rise in the next 12 months, but optimism moderated in September.
