Consumer Confidence Declines as Current and Future Conditions Weaken
Consumer confidence decreased 6.7 points in September to 81.9. Among its components, the Present Situation Index and Expectations Index both contracted as consumers’ views of current conditions and their outlook for the future both worsened.
The Present Situation Index, reflecting current business and labor market conditions, fell 7.9 points to 109.3. Meanwhile, the Expectations Index, which reflects consumers’ short-term outlook for income, business and labor market conditions, declined 5.9 points to 63.6, remaining below the recession signal threshold of 80 since February 2025.
Views of the current labor market worsened in September but remained in positive territory, with 23.6% of consumers saying jobs were “plentiful,” down from 24.5% in August, while 21.9% said jobs were “hard to get,” up from 20.3%. Looking to the future, 14.0% expect more jobs to be available, down from 14.8% in August, while 28.4% anticipate fewer jobs, up from 26.1% the previous month.
Consumers’ views of the economy were more pessimistic in September. At the same time, mentions of prices and the high cost of goods and services, particularly oil and gas, climbed from the month prior. Consumers’ 12-month inflation expectations edged up in September, and the proportion of consumers expecting higher interest rates increased from 63.2% to 68.4%. In addition, the share of consumers who believe a recession is “somewhat likely” over the next year rose, while the share who believe a recession is “not likely” fell.
As interest rates ticked up, buying plans for both cars and homes declined slightly in September. Consumers’ plans to purchase other big-ticket items moderated, while intentions to spend more on services also weakened. Among the service categories, restaurants, bars and takeout remained the top planned service spending category, alongside streaming, internet and mobile services, beauty and personal care, utilities and healthcare. Overall, consumers’ views of their current financial situation weakened, while expectations for their future financial situation deteriorated as well in September.
