Consumer confidence falls in September as job market weakens, inflation remains uncontrolled

Consumer confidence of the current economic conditions fell significantly in September as new data shows a softening jobs report and rising prices.

The Conference Board logo, investank.org.

The latest press release by the economic analysis nonprofit organization The Conference Board showed that the Consumer Confidence Index (a measurement by TCB indicating consumers' general assessment of economic conditions) fell 3.6 points in September to 94.2 points, down from the 97.8 points recorded last month. Similarly, the Present Situation Index (a measurement by TCB indication consumers' general assessment of "current business and labor market conditions") fell by 7 points in September to 125.4 points. The Expectations Index, based on consumers' "short-term outlook for income, business, and labor market conditions," decreased 1.3 points in September to 73.4.

Stephanie Guichard, the Senior Economist of Global Indicators at The Conference Board, summarized the results of the updated TCB indexes. "Consumer confidence weakened in September, declining to the lowest level since April 2025... The present situation component registered its largest drop in a year. Consumers’ assessment of business conditions was much less positive than in recent months, while their appraisal of current job availability fell for the ninth straight month to reach a new multiyear low. This is consistent with the decline in job openings. Expectations also weakened in September, but to a lesser extent. Consumers were a bit more pessimistic about future job availability and future business conditions but optimism about future income increased, mitigating the overall decline in the Expectations Index."

Guichard also responded to demographic-specific and other important data. "Consumers’ write-in responses showed that references to prices and inflation rose in September, regaining its top position as the main topic influencing consumers’ views of the economy. References to tariffs declined this month but remained elevated and continued to be associated with concerns about higher prices. Nonetheless, consumers’ average 12-month inflation expectations inched down, to 5.8% in September from 6.1% in August. This is still notably above 5.0%, the level at the end of 2024," she stated, according to The Conference Board's press release.

This data comes as new private datapoints showed a weakening job market (as the government remains shut down). The Job Openings and Labor Turnover Survey report for August released this Tuesday showed a plunging to 115,000 construction job openings, the second-largest absolute drop on record. Additionally, CNBC reported that the economy lost 32,000 jobs in the private sector according to private payroll data from the ADP, the biggest downturn since March 2023.

Bill Merz, Head of Capital Markets Research at U.S. Bank Asset Management argued that "Initial jobless claims indicate companies have yet to meaningfully reduce workforces, which when paired with recently reported payroll figures, suggests we’re in a ‘slow hiring, slow firing’ environment." And less individuals now are avoiding seeking alternative careers as the opportunity cost in doing so is much higher than previously.

Investors have rather used these job losses to prove that another interest rate cut is coming in the near future. Michelle Bowman, the Vice Chair of the Federal Reserve, argued in late September that, "It’s a lot easier to support the labor market by lowering the federal funds rate than it is to fix it after it’s broken." This was why many stocks made gains today.