U.S. consumer confidence dove in September to its lowest level since 2014, delivering another warning that Americans are becoming increasingly uneasy about inflation, the labor market and the broader economy.
The Conference Board’s Consumer Confidence Index dropped 6.7 points to 81.9 from a downwardly revised 88.6 in August. The decline was substantially worse than economists expected, with forecasts calling for a reading around 89.
Consumers Grow More Pessimistic
The weakness stretched across both consumers’ assessment of current conditions and their expectations for the months ahead. The Present Situation Index fell to 109.3 from 117.2, while the Expectations Index dropped to 63.6 from 69.5. Consumers became more pessimistic about both business conditions and employment prospects over the next six months.
Assessments of current business conditions also turned negative for the first time since September 2024, while expectations for household income growth weakened. The latest Conference Board numbers reinforce another recent warning from the University of Michigan. Its separate Consumer Sentiment Index fell to a four-month low of 48.1 in September from 51.7 in August, with views of current and future personal finances deteriorating sharply.
Inflation and Energy Costs Hit Households
Persistent price pressures remain a major source of anxiety. The Conference Board said consumer references to prices and the high cost of goods and services increased in September, with concerns surrounding oil and gasoline becoming particularly prominent. The University of Michigan survey showed the same pattern. Americans’ year-ahead inflation expectations jumped to 4.6% in September from 4% in August, while long-term expectations edged up to 3.4%.
That combination is important for investors because weakening confidence does not necessarily mean inflation pressure is disappearing. If consumers simultaneously pull back on spending while expecting prices to remain elevated, the economy could face a more difficult mix of slower demand and stubborn inflation.
Labor Market Adds Another Warning Sign
Tuesday’s labor data added to those concerns. U.S. job openings declined to roughly 7.1 million in August from 7.34 million in July, according to the Bureau of Labor Statistics, pointing to softer demand for workers. Layoffs remained relatively low, suggesting employers are not aggressively cutting existing staff.
But businesses also appear reluctant to expand their workforces, reinforcing the “low hire, low fire” environment that has increasingly defined the labor market. The timing makes Friday’s September jobs report especially important. Economists expect payroll growth to slow to around 90,000 jobs after the economy added 162,000 in August, while unemployment is expected to remain at 4.1%.
Looking Ahead
September’s confidence plunge adds to evidence that the American consumer is becoming more cautious. High prices, elevated borrowing costs and growing concerns about employment are all weighing on households, potentially creating a tougher backdrop for consumer-dependent companies heading into the final months of 2026. For investors, Friday’s jobs report will provide the next major test. A significant slowdown in hiring could reinforce concerns that weakening confidence is beginning to reflect a broader economic slowdown, while stronger employment growth could ease some worries — but potentially keep pressure on interest rates and inflation.
