Americans haven’t felt this gloomy about the economy since 2014. The Conference Board’s consumer confidence index fell 6.7 points to 81.9 in September – and economists had expected something close to 89.
The consumer confidence drop landed Tuesday, Sept. 29, the same day the 30-year Treasury yield climbed to its highest level in more than two decades. Gas prices, stubborn inflation and a Fed that just started raising rates again are all weighing on households. Here’s what the survey actually found, why it matters for your wallet, and the three dates to circle before Halloween.
Quick note: this article is for general information only and is not investment advice.
Consumer Confidence by the Numbers: A 12-Year Low
According to The Conference Board, the headline index slid to 81.9 in September from 88.6 in August. Economists polled by Reuters had forecast 89.2, according to Quartz, so this was a big miss, not a small wobble.
Both halves of the survey got worse:
- Present Situation Index (how people feel right now): down 7.9 points to 109.3.
- Expectations Index (the six-month outlook): down 5.9 points to 63.6 – its third straight monthly decline.
That Expectations number is the one economists watch most closely. A reading below 80 is a level that often signals a recession within a year, and the index has now been under that line since February 2025, according to the National Association of Home Builders’ Eye on Housing blog.
One important caveat: that threshold has flashed for well over a year without a recession arriving. It’s a warning light, not a verdict.
The survey window ran Sept. 1-23, which included the Federal Reserve’s mid-September rate hike and ongoing geopolitical tension, the Conference Board said.
What is the consumer confidence index?
The Consumer Confidence Index is a monthly survey of how Americans feel about business conditions, jobs and their own income, both today and six months out. It’s benchmarked so that 1985 equals 100, and it’s published at 10 a.m. ET on the last Tuesday of every month. The survey is conducted online for the Conference Board by the research firm Toluna. Because consumer spending drives most of the U.S. economy, economists treat consumer confidence as an early hint of whether people will open or close their wallets in the months ahead.
Why Americans Are So Worried: Prices, Gas and Jobs
Conference Board chief economist Dana M. Peterson didn’t sugarcoat it. “The Consumer Confidence Index deteriorated notably in September, following two prior months of softening,” she said in the September release.
The write-in answers tell the story. “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,” Peterson said. Comments about war and conflict eased a bit but stayed elevated, and people also cited politics, trade and employment.
If you’ve been watching the pump, that tracks. Oil has been whipsawed by the fight over the Strait of Hormuz – we broke down what Brent above $105 means for gas and the Fed earlier this week.
Inflation expectations are climbing
Consumers now expect prices to keep running hot. Average 12-month inflation expectations rose 0.3 percentage points to 6.1%, with the median at 5.1%. And 68.4% of consumers expect interest rates to be higher a year from now, a jump of 5.2 points in one month.
Household finances just flipped negative
Here’s the stat that stings. More people now describe their family’s current finances as “bad” than “good” – only the second time that’s happened since the question was added four years ago, the Conference Board said.
Views of current business conditions also turned negative for the first time since September 2024. And the share of people who think a recession in the next 12 months is “somewhat likely” went up.
The Jobs Picture: Anxious, But Not Broken
Consumers are nervous about work. The “labor market differential” – people saying jobs are “plentiful” minus those saying jobs are “hard to get” – shrank 2.5 points to just +1.7%. Looking ahead, 28.4% expect fewer jobs in six months, up from 26.1% in August.
But the hard data released the same morning looked sturdier. The government’s JOLTS report showed job openings fell by 256,000 in August, while hiring rose by 46,000 and layoffs dropped by 61,000, Axios reported.
Axios economics correspondent Neil Irwin summed up the disconnect in one line: “The job market is doing fine, but Americans hate this economy anyway.”
That gap between how people feel and what the numbers show has been a theme for years. Still, sentiment matters. When households feel squeezed, they tend to pull back on big purchases, which can eventually become a self-fulfilling slowdown.
What Low Consumer Confidence Means for Spending
The survey also asks what people plan to buy, and the shopping list is shrinking. Plans to purchase cars and homes both slipped on a six-month moving average basis. Planned spending on refrigerators and TVs fell the most among big-ticket items.
Services are getting trimmed too. Expected spending on hotels, movies, airfare and amusement parks moderated. The top five planned services categories were:
- Restaurants, bars and takeout
- Streaming, internet and mobile services
- Beauty and personal care
- Utilities
- Healthcare
One bright spot: vacation plans held up. Some 42.6% of consumers plan a trip in the next six months, up slightly from August – though the gain was all domestic travel, while foreign trips dipped.
Who’s feeling it most? Confidence fell across all age groups and nearly all income groups on a six-month average. Households earning $125,000 to $149,000 saw the biggest decline over the past six months. Gen Z and Millennials remain the most upbeat generations, while confidence among Gen X, Baby Boomers and the Silent Generation kept weakening.
Wall Street’s Reaction: Yields at 2002 Levels
Stocks barely flinched. The S&P 500 slipped about 0.2% to 7,670.84 on Tuesday, the Dow lost 131.59 points (about 0.3%) to 51,349.92, and the Nasdaq dipped 0.09% to 26,797.54. That followed a steeper drop of nearly 0.8% for the S&P 500 on Monday.
The bond market was the louder story. The 30-year Treasury yield rose to about 5.61%, a level not seen since 2002, while the 10-year hovered near 5.28%, according to a closing recap from Hammerstone Markets published by Investrade. Higher long-term yields feed directly into mortgage rates – our explainer on what a 5% 10-year yield means for your mortgage and savings walks through the math.
Stocks pared losses late in the day after New York Fed President John Williams said another rate hike may be warranted later this year but signaled there’s no need to rush, suggesting the Fed could wait past October.
Consumer Confidence and the Fed: 3 Dates to Watch
This consumer confidence reading is just the opening act of a packed stretch. Keep an eye on these:
1. Today, Sept. 30: PCE inflation and GDP
The Bureau of Economic Analysis releases August PCE inflation – the Fed’s favorite price gauge – plus a revised read on second-quarter GDP at 8:30 a.m. ET. A hot inflation number would add fuel to rate-hike bets.
2. Friday, Oct. 2: The September jobs report
This is the big one for the “feelings vs. data” debate. If hiring holds up, the Fed has more room to keep tightening. If it cracks, recession fears get real. Our stock market week-ahead preview lays out what forecasters expect.
3. Oct. 27-28: The next Fed meeting
The Fed’s next policy decision is due Oct. 28. Williams’ comments nudged some traders toward a pause until December, but a hot PCE print or a strong jobs report could flip that quickly.
What You Can Do Right Now
You can’t control oil prices or the Fed. But you can make your own finances more resilient while consumer confidence is sinking:
- Build a cushion. If your job feels shaky, even a small emergency fund buys you time and options.
- Attack variable-rate debt. With 68% of consumers expecting higher rates, credit card balances are the most expensive place to carry debt. Paying them down is a guaranteed return.
- Park cash where it earns. High yields cut both ways – savings accounts, CDs and Treasury bills are paying more than they have in years.
- Lock in big purchases carefully. If you’re shopping for a car or home, get quotes now and watch this week’s data before committing.
- Don’t panic-sell. Sentiment surveys are notoriously noisy, and stocks shrugged off this one. Stick to your long-term plan.
The bottom line: consumer confidence just hit its lowest level in 12 years, driven mostly by prices and gas. The job market is still holding, but this week’s inflation and jobs data will decide whether that gloom stays a mood or turns into a real slowdown. Bookmark USA One News for updates as each number drops.
