Consumer Confidence Sinks 6.7 Points as Labor Market Views Sour

The Conference Board's Consumer Confidence Index fell 6.7 points in September to 81.9, down from 88.6 in August, extending a three-month slide in American households' assessment of the economy and, more pointedly for workers, of the labor market itself.

The decline was broad. The Present Situation Index, which tracks consumers' assessment of current business and labor market conditions, retreated 7.9 points to 109.3. The Expectations Index, gauging the short-term outlook for income, business and jobs, fell 5.9 points to 63.6 — its third consecutive monthly decline. The survey window ran September 1–23 and captured both a federal funds rate hike and ongoing geopolitical tensions.

For job seekers, the most consequential number is the labor market differential: the share of consumers saying jobs are "plentiful" minus the share saying jobs are "hard to get." It retreated 2.5 percentage points to just +1.7% in September. That margin is now thin enough that a further deterioration of similar size would push perceptions of job availability into negative territory — a signal historically associated with slower hiring and more cautious employer behavior.

"The Consumer Confidence Index deteriorated notably in September, following two prior months of softening," said Dana M. Peterson, chief economist at The Conference Board. "The Present Situation Index fell sharply, while the Expectations Index slipped further into negative territory."

Perceptions of business conditions crossed a threshold as well. Net views of current business conditions — the share calling them "good" versus "bad" — declined 3.4 percentage points to –1.9%, the first negative reading since September 2024, driven largely by more consumers reporting conditions are "bad."

Household finances followed the same direction. Net views of families' current financial situation turned negative for only the second time since the question was introduced four years ago, as the share describing their finances as "bad" overtook those saying "good." The share of consumers who believe a US recession over the next 12 months is "somewhat likely" rose, while those calling a recession "not likely" declined.

Peterson noted that write-in responses about the economy were mostly pessimistic, with references to prices, the high cost of goods and services, and oil and gas prices in particular rising to new heights — reflecting September's surge in fuel costs.

"Comments about war/conflict eased this month but remained elevated," Peterson added. "Consumers also frequently cited politics, trade, and employment in their write-in responses, though to a lesser extent."

The backdrop compounds the pressure: mortgage rates recently hit a two-year high, and the Federal Reserve raised interest rates for the first time in over a year, with another hike possible as inflation accelerates.

Notably, consumers still expected their household incomes to rise over the next six months — though less so than in previous months — and perceptions of the current labor market, while worsened, remained within positive territory. For workers, the September reading suggests bargaining conditions are tightening faster than they have in a year, and the October release will show whether the labor market differential holds above zero.