U.S. consumer confidence fell sharply in September to its lowest level in more than 12 years, adding to signs that households are becoming more worried about jobs, prices and the direction of the economy. The Conference Board said its Consumer Confidence Index dropped 6.7 points to 81.9 from 88.6 in August, well below the 89.2 level economists surveyed by Reuters had expected.
The deterioration was broad, with consumers becoming more pessimistic about both current conditions and the six-month outlook. The Conference Board’s Present Situation Index fell to 109.3 and its Expectations Index dropped to 63.6, marking a third consecutive monthly decline in expectations.
US Consumer Confidence Drops Across the Economy
The September decline was not limited to one political group, income bracket or age category. Reuters reported that confidence weakened across party affiliation, age groups and income levels, suggesting the pressure is being felt broadly rather than by one narrow segment of consumers.
The Expectations Index remained well below 80, a level the Conference Board has historically associated with elevated recession risk when sustained over time. That does not mean a recession is certain, but it shows that consumers are increasingly doubtful about future income, business conditions and employment.
Households also became more negative about current business conditions. Conference Board Chief Economist Dana Peterson said consumers’ assessments of present business conditions turned negative for the first time since September 2024, while perceptions of the labor market weakened even though they remained positive overall.
Jobs Are Becoming a Bigger Source of Anxiety
Consumers reported that jobs were becoming harder to find. The share saying jobs were “plentiful” fell to 23.6%, the lowest since February 2021, while the share saying jobs were “hard to get” rose to 21.9%, the highest since January 2021.
A separate Labor Department report reinforced that concern. Job openings fell by 256,000 in August to 7.079 million, below the 7.225 million forecast by economists, while the ratio of job openings to unemployed workers declined to 1.01 from 1.06 in July.
The weakness was concentrated in several sectors, including professional and business services, health care and social assistance, manufacturing and construction. Hiring did edge higher overall, but layoffs remained low, producing a labor market that is slowing without yet showing the kind of widespread job losses usually associated with a recession.
High Prices and Interest Rates Weigh on Households
Affordability remains a central concern. Consumers cited the cost of goods and services, gasoline and other energy expenses more frequently in September, while inflation expectations also moved higher during the month.
The Federal Reserve raised its benchmark interest rate by a quarter point in September to a range of 3.75% to 4.00%, its first increase in three years. Higher rates have pushed up borrowing costs for mortgages, credit cards and business loans, adding another layer of pressure for households already dealing with elevated food and fuel prices.
Housing has become especially difficult for first-time buyers. Reuters reported that the average rate on a 30-year fixed mortgage reached 7.03% last week, its highest level since January 2025, while home prices rose 2.6% from a year earlier in July.
Energy Prices Are Feeding Economic Pessimism
The U.S.-Iran conflict has contributed to higher oil and diesel prices, intensifying inflation concerns and complicating the Federal Reserve’s policy outlook. Energy costs affect transportation, shipping, food production and household budgets, so persistent increases can spread beyond the gasoline pump.
Consumer responses in the Conference Board survey reflected that strain. References to oil, gas and the high cost of goods rose sharply in September, showing that households are connecting geopolitical events directly to everyday expenses.
American News Brief previously reported that higher crude prices were pushing markets to reassess the risk of another Federal Reserve rate increase. The latest confidence data shows that the same pressures are now increasingly visible in household sentiment.
What the Data Means for the Fed and Midterms
The Federal Reserve now faces a difficult mix of weak confidence, softer labor demand and persistent inflation pressure. Policymakers must decide whether elevated energy costs justify further rate increases even as households and businesses show signs of becoming more cautious.
Markets have been moving rapidly as investors weigh those competing signals. Expectations for another October rate increase have shifted after comments from Federal Reserve officials, underscoring how sensitive financial conditions remain to incoming jobs and inflation data.
The political stakes are also significant because the Nov. 3 midterm elections are approaching. Consumer perceptions of prices, jobs and borrowing costs often influence how voters judge economic conditions, even when headline growth or employment statistics remain relatively strong.
US consumer confidence is therefore becoming an important measure of the gap between aggregate economic data and household experience. September’s decline suggests that many Americans are feeling less secure about both the present and the future, creating a challenge for policymakers trying to balance inflation control with economic stability.
