U.S. consumer confidence drops as inflation and labor worries deepen

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U.S. consumer confidence drops

Highlights

Conference Board Consumer Confidence Index drops 6.7 points to 81.9 in September, missing the Dow Jones forecast of 89 amid inflation and labor concerns.
Present Situation Index falls 7.9 points to 109.3, Expectations Index declines 5.9 points to 63.6, and average inflation expectations rise to 6.1%.
August job openings decline to 7.08 million, missing the 7.2 million estimate, driven by drops in professional, business services and health care roles.

September confidence decline broadens

As reported by CNBC, citing The Conference Board, its Consumer Confidence Index falls 6.7 points in September to 81.9, well below the Dow Jones consensus forecast of 89. The group says respondents are increasingly worried about inflation, job prospects and the effect of higher prices on their personal finances.

For the first time in the four-year history of the survey question, more respondents describe their personal finances as bad rather than good. Dana Peterson, chief economist at The Conference Board, says consumer assessments of current business conditions turn negative for the first time since September 2024, while write-in responses are mostly pessimistic and show heightened concern about the cost of goods, services, oil and gas.

Other survey measures also deteriorate. The Present Situation Index drops 7.9 points to 109.3, while the Expectations Index, which tracks the six-month outlook, declines 5.9 points to 63.6.

Labor market and inflation concerns intensify

The labor market gauge tracking the gap between respondents who say jobs are plentiful and those who say they are hard to get narrows by 2.5 percentage points to 1.7%, indicating softer perceptions of employment conditions. The weaker reading comes as uncertainty tied to the Iran war continues to feed inflation concerns and is reflected in higher Treasury yields and mortgage rates.

Average inflation expectations rise to 6.1% from August, while the median expectation increases to 5.1%. The Conference Board data aligns with other recent measures, including the University of Michigan survey, which shows consumer sentiment falls 7% in September to its second-lowest level on record.

Separate data released Tuesday by the Bureau of Labor Statistics shows job openings edge down in August to 7.08 million, missing the 7.2 million Wall Street estimate. Openings decline notably in professional and business services and in health care-related jobs, while hires inch higher, quits are little changed and layoffs ease slightly.

In our earlier report on the Trump administration’s inflation messaging, we covered how National Economic Council Director Kevin Hassett argued that pandemic-era stimulus—especially the $1.9 trillion American Rescue Plan signed in 2021—continues to weigh on prices. We also noted that affordability remains a key political fault line heading into the midterms, even as more recent external shocks have added fresh pressure to inflation expectations.

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