US Consumer Confidence Falls to Lowest Level Since 2014

Americans' faith in the economy sank to its lowest point in more than a decade in September, as worries about high prices and rising borrowing costs weighed on households.

The Conference Board said Tuesday that its Consumer Confidence Index fell 6.7 points to 81.9, down from 88.6 in August and below the 89-point forecast economists surveyed by Dow Jones had expected. The September result is the weakest reading since April 2014, slipping beneath the lowest point recorded during the pandemic, according to the research group's consumer confidence report.

"The Consumer Confidence Index deteriorated notably in September, following two prior months of softening," said Dana Peterson, chief economist at the Conference Board, in a statement. Peterson said the Present Situation Index "fell sharply" while the Expectations Index "slipped further into negative territory."

What the consumer confidence numbers show

The Present Situation Index, which measures how consumers assess current business and labor market conditions, retreated by nearly eight points to 109.3. Net assessments of business conditions turned negative for the first time since September 2024. Perceptions of the current labor market also worsened, though they remained within positive territory: the labor market differential, the share of consumers calling jobs plentiful minus the share calling them hard to get, narrowed by 2.5 percentage points to 1.7 percent.

The Expectations Index, which tracks the short-term outlook for income, business and labor market conditions, dropped 5.9 points to 63.6, its third straight monthly decline. Consumers expected both business conditions and the labor market to weaken over the next six months. Fewer saw raises ahead: 17.9 percent expected their incomes to increase, down from 19.0 percent in August, while 15.4 percent expected a decline, up from 13.5 percent. Household finances are already stretched for many borrowers, with canceled student loans still showing up on credit reports. Consumers still anticipated their household incomes to rise, the Conference Board noted, but less so than in previous months.

Write-in responses collected from September 1 to 23 were mostly pessimistic, the Conference Board said. 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. Mentions of war and conflict eased but stayed elevated, and respondents also frequently cited politics, trade and employment.

The survey window included a federal funds rate hike and ongoing geopolitical tensions, according to the Board's September press release. The monthly survey is based on an online sample conducted for the Conference Board by Toluna, a research firm whose panel covers more than thirty-six million consumers. The cutoff for the preliminary results was September 23, and the index uses 1985 as its base year of one hundred.

What comes next for markets and spending

The figures land at a delicate moment for policymakers and investors. The Commerce Department releases August PCE inflation data today, and the September jobs report follows on October 2, with forecasts pointing to a gain of about one hundred thirty thousand jobs and unemployment holding near recent levels.

Markets have spent September repricing interest-rate expectations. The benchmark 10-year Treasury yield climbed to 5.29 percent, its highest since June 2007, while the thirty-year yield reached 5.62 percent, its highest since June 2002, reported by Invezz. The average thirty-year fixed mortgage rate touched 7.58 percent on Tuesday, its highest since November 2023, raising the cost of buying a home for millions of Americans.

The Federal Reserve currently targets a federal funds rate between 3.75 and 4 percent, with officials' projections pointing to about 4.1 percent by year end. After New York Fed President John Williams said the central bank has time to assess incoming data before raising rates again, traders cut the odds of an October hike to roughly half, according to CME FedWatch data reported by Morningstar.

The labor market is sending mixed signals. US job openings fell to 7.079 million in August, down from 7.335 million in July and below economists' forecasts, the Labor Department reported Tuesday.

Asian markets steadied on Wednesday as investors awaited the American inflation data. Japan's Nikkei 225 climbed 1.94 percent, while the broader MSCI Asia Pacific Index gained 0.9 percent, with ten of its eleven industry groups advancing, according to Invezz.

The slump also arrives just over a month before the midterm elections. President Donald Trump has continued to blame his predecessor, Democrat Joe Biden, for high prices, even as inflation has risen since Trump's inauguration last year, according to TTNews.

Consumer spending powers the bulk of the US economy, and confidence readings often foreshadow shifts in how households spend. The September consumer confidence numbers suggest Americans are entering the year's final quarter more cautious, a mood retailers, restaurants and travel companies will be watching as the holiday season approaches.