Consumer confidence across the United States is falling, according to a new Conference Board report.
Confidence in both the current situation and the short-term outlook has dropped, with the latter falling for the third consecutive month.
Donald Trump speaking with supporters at a campaign rally at the Prescott Valley Event Center in Prescott Valley, Arizona. Image Credit: Gage Skidmore.
Donald Trump Back in 2016. Image Credit: Creative Commons.
It comes amid growing frustration with President Donald Trump’s foreign policy and his handling of the cost of living.
Context in Confidence
The Conference Board’s Consumer Confidence Survey reflects current business conditions and developments expected in the coming months.
The monthly report details consumer attitudes, buying intentions, vacation plans, and consumer expectations for inflation, stock prices, and interest rates.
The report is split into two indices: the President’s Situation Index, which reflects consumers’ assessment of current business and labor market conditions, and the Expectations Index, which assesses consumers’ short-term outlook for income, business, and labor market conditions.
The Fed then combined them into a total Consumer Confidence Index.
Both indices use a baseline of 100 from 1985. Any figure above 100 suggests consumers are more confident than they were four decades ago, and vice versa.
All Figures Dropping
In September, the Consumer Confidence Index fell by 6.7 points to 81.9, down from 88.6 in August.
The Present Situation Index fell by even more, dropping 7.9 points to 109.3.
Similarly, the Expectations Index fell 5.9 points to 63.6, marking the third consecutive monthly decline.
“The Consumer Confidence Index deteriorated notably in September, following two prior months of softening,” said Dana M. Peterson, Chief Economist for The Conference Board.
“The Present Situation Index fell sharply, while the Expectations Index slipped further into negative territory. Consumer appraisals of current business conditions became negative for the first time since September 2024. Perceptions of the current labor market also worsened, though remained within positive territory. Over the next six months, consumers expected both business conditions and the labor market to weaken. Consumers still anticipated their household incomes to rise, but less so compared to previous months.”
Peterson noted that factors affecting the economy were “mostly pessimistic” in September, with references to “prices, the high cost of goods and services, and oil and gas prices in particular, rose to new heights, reflecting September’s surge in fuel costs.”
“Comments about war/conflict eased this month but remained elevated. Consumers also frequently cited politics, trade, and employment in their write-in responses, though to a lesser extent,” he added.
A Wider Breakdown
Net views of current business conditions fell, with 3.4% of respondents saying that conditions had moved from “good” to “bad.” More consumers also said jobs were becoming harder to get, down 2.5% from August to September.
Consumer confidence has dropped across all age groups and almost all income groups on a six-month moving average.
Higher-income households remain slightly more optimistic, while those with a household income of 125,000-149,000 reported the largest fall in confidence since March.
Younger generations remain more confident than their older counterparts, but confidence fell across all political affiliations.
As a result, consumers are changing their spending plans.
Plans to buy automobiles and homes have declined over the past month, while durable goods, furniture, and smartphones remain at the top of many wish lists.
Services spending has also fallen over the past month, with consumers planning to spend less money on eating and drinking out, streaming services, and health care.
Midterms Approaching
The decline in confidence marks bad news for President Trump and the GOP ahead of next month’s midterm elections.
Trump’s approval has fallen sharply in recent months, particularly on the cost of living; in an AP-NORC poll released Thursday, 1st October, only 17% of respondents approved of his administration’s efforts.
The President himself is not on the ballot, but Republican candidates for the Senate and House of Representatives are.
However, current polling suggests Congress will be more blue than red come the new year, with Democrats leading by nine percentage points in the average generic congressional ballot, the party’s largest lead so far.
To support his party despite his own declining popularity, Trump has planned an aggressive campaign schedule over the next month, visiting 35 battlegrounds before Tuesday’s vote, 3rd November.
However, with consumer confidence dropping and polls painting an uncomfortable picture for the GOP, it may be too little, too late to make a meaningful impact before the midterms.
About the Author: Shay Bottomley
Shay Bottomley is a British journalist. He has written for the Western Standard, Business Insider, Maidenhead Advertiser, Slough Express, Windsor Express, Berkshire Live and Southend Echo.
