(Bloomberg) — US consumer confidence fell in September to the lowest level since 2014 as views about the economy and the labor market deteriorated.
The Conference Board’s gauge of confidence decreased 6.7 points to 81.9 after a downward revision to the prior month, data released Tuesday showed. The figure was well below all expectations in a Bloomberg survey of economists.
An indicator of present conditions dropped nearly 8 points to the lowest since 2021, and a measure of expectations for the next six months declined to a more than one-year low.
The report illustrates persistent anxiety about the cost of living, including high gasoline prices, that is seeping into diminished buying plans. Smaller shares of consumers said they intend to buy vehicles, homes and many major appliances.
Inflation expectations for the next year worsened, while the share of respondents expecting a pickup in interest rates rose to the highest in more than four years. The Federal Reserve’s Open Market Committee this month raised interest rates and several policymakers have since argued that borrowing costs should be higher.
“While higher energy prices are adding to inflationary pressure in some areas, the renewed pressure on real incomes will be a significant headwind to growth and warrants the FOMC being cautious with any further increases in the funds rate,” Samuel Tombs and Oliver Allen, economists at Pantheon Macroeconomics, said in a note.
The war in Iran has pushed gasoline prices well above $4 a gallon, according to American Automobile Association data. US retail diesel prices are near record levels, and the cost of heating oil has jumped ahead of winter.
“Consumers’ write-in responses regarding factors affecting the economy were mostly pessimistic in September,” Dana Peterson, chief economist at the Conference Board, said in a statement. “References to prices, the high cost of goods and services, and oil and gas prices in particular, rose to new heights.”
Broad Decline
The deterioration in overall confidence this month was broad across age and income groups, as well as by region.
So far, however, consumer spending and the labor market have proved resilient in the face of elevated inflation.
The Conference Board survey showed the share of consumers who said jobs were plentiful fell to the lowest level since 2021, while the share saying jobs were hard to get rose.
The difference between the two — a metric closely followed by economists — narrowed to the smallest in more than 5 1/2 years.
Separate data from the government out Tuesday showed job openings in August fell to a five-month low.
Income expectations also deteriorated in September. The share expecting incomes to grow in the next six months fell to the lowest since the start of the year, while the share anticipating a decline climbed to a more than one-year high.
The survey period for the report was Sept. 1 to Sept. 23.
–With assistance from Cécile Daurat.
(Adds graphic, economist’s comment)
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