Economic sentiment among Americans dropped to its lowest point in over ten years this month, driven by persistent inflation, stagnant pay growth, and the ongoing war in Iran.
According to data released Tuesday by the Conference Board, its consumer confidence index plummeted by 6.7 points to 81.9 for September, falling from 88.6 in August.
This marks the lowest figure recorded by the survey since April 2014, undercutting even pandemic-era lows.
Public evaluation of present conditions dropped 7.9 points to 109.3, while expectations for the short-term future slipped 5.9 points down to 63.6.
Persistent inflation over five years continues to weigh on the public, creating potential political difficulties for President Donald Trump and the Republican Party with midterm elections taking place in just over a month.
Written feedback gathered in the survey between September 1 and September 23 reflected widespread negativity, with participants regularly citing the surging prices of fuel, general merchandise, and essential services.
"The Consumer Confidence Index deteriorated notably in September, following two prior months of softening," stated Dana Peterson, chief economist at the Conference Board, who highlighted that public perceptions of business conditions turned negative for the first time since September 2024.
Although Trump has consistently faulted his predecessor, Democrat Joe Biden, for escalating living costs, inflation has continued upward since Trump took office last year.
Official data published earlier this month revealed an acceleration in consumer inflation alongside rising fuel prices as Middle East hostilities persist.
On Friday, the Labor Department noted that the consumer price index increased by 3.4% year-over-year last month, matching July's rate.
On a monthly basis, however, price increases accelerated as costs rose 0.4% from July, four times the 0.1% gain seen the previous month.
Two weeks ago, the Federal Reserve implemented its first benchmark interest rate increase since 2023 to combat ongoing inflation.
Central bank officials indicated that an additional rate increase remains possible before the end of the year.
The quarter-percentage-point raise pushed the central bank's primary rate to roughly 3.9%, a move expected to gradually increase consumer borrowing expenses across home mortgages, car loans, and credit cards.
The surge in prices extends beyond regular unleaded fuel, which currently averages $4.46 per gallon. Costs for household appliances, automotive maintenance, and cellular service plans also saw increases during August.
The personal consumption expenditures price index, which serves as the Federal Reserve’s primary inflation benchmark, showed a 3.7% year-over-year rise in June.
While this marked a decline from May's 4.1% figure, it sits above the 2.8% recorded prior to the Iran conflict starting on Feb. 28, and up from 2.5% during Trump's inauguration in January 2025.
Official August PCE figures are scheduled for release Wednesday.
Assessment of the job market among consumers deteriorated in September while staying net-positive, according to the board. Most respondents anticipated further gains in household income, though at a more subdued rate than previously reported.
Following a slow summer of hiring, the American job market recovered in August with the unexpected addition of 162,000 positions.
The unemployment rate held at 4.1%, though this figure was partially influenced by a substantial count of individuals who stopped seeking work over prior months.
Price increases have remained a central concern for businesses and households throughout the year, with modest wage growth compounding consumer pressure. Average hourly pay grew by 3.1% year-over-year last month, registering the smallest annual gain since May 2021.
The federal government will publish September employment data on Friday.
