US Consumer Confidence Plummets to 12-Year Low in September
US consumer confidence fell to its lowest level in more than a decade this month, according to data released Tuesday by the Conference Board. The group's Consumer Confidence Index dropped to 81.9 in September, a decline of 6.7 points from August. That reading is the weakest since 2014, when sentiment was recovering from a trough below 30 during the financial crisis.
The Expectations Index, which tracks consumers' six-month outlook for the economy, also slipped in September, falling 3.2 points to just under 60. That measure had last dipped below 60 in 2023, the first such occurrence since 2013.
Inflation has stayed above the Federal Reserve's 2 percent target for more than five years and has climbed this year amid the conflict with Iran. The Middle Eastern war, which reached its seven-month mark on Monday, has driven up energy prices after Iran restricted shipping through the Strait of Hormuz.
Dana Peterson, the Conference Board's chief economist, said consumers' assessments of current business conditions turned negative in September for the first time in two years. "Perceptions of the current labor market also worsened, though remained within positive territory," Peterson said in the board's release. "Over the next six months, consumers expected both business conditions and the labor market to weaken." She added: "Consumers still anticipated their household incomes to rise, but less so compared to previous months."
A separate gauge of public confidence, the University of Michigan Surveys of Consumers index, also declined last month, falling to 48.1 — a drop of 7 percentage points from September 2025.
Fed officials do not expect inflation, as measured by the personal consumption expenditures (PCE) price index, to return to 2 percent until 2029, according to the median projection in the central bank's latest summary of economic projections. The Bureau of Economic Analysis is scheduled to publish PCE data for August on Wednesday. The Federal Reserve Bank of Cleveland estimates that annual PCE inflation was 3.9 percent last month, up from 3.7 percent in July.
To address stubborn inflation, the Federal Open Market Committee raised interest rates by a quarter point earlier this month, bringing the target range to 3.75 percent to 4 percent. The FOMC's decision was unanimous and followed calls from President Trump for rate cuts. Persistent inflation, compounded by the unpopular Iran conflict, has created political challenges for Republican lawmakers aiming to preserve their party's control of Congress in November.
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