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The Conference Board’s Consumer Confidence Index fell 6.7 points to 81.9 in September, its third consecutive monthly decline in expectations. Consumers turned negative on current business conditions for the first time since September 2024, and inflation expectations rose to 6.1%.
The Conference Board Consumer Confidence Index fell 6.7 points to 81.9 in September, down from 88.6 in August, according to preliminary results published by the research organization on September 29, 2026. The decline marked the third consecutive monthly drop in the Expectations Index and pushed consumer appraisals of current business conditions into negative territory for the first time since September 2024.
Both major subindices weakened during the month. The Present Situation Index, which tracks consumers’ assessment of current business and labor market conditions, fell 7.9 points to 109.3. The Expectations Index, which measures the short-term outlook for income, business and labor conditions, declined 5.9 points to 63.6, its third straight monthly decrease.
Net views of current business conditions — the share of respondents rating conditions “good” minus those rating them “bad” — declined by 3.4 percentage points to -1.9%, a drop the Conference Board attributed largely to more consumers describing business conditions as “bad.” Perceptions of current employment also softened, with the labor market differential retreating 2.5 percentage points to +1.7%, though it remained positive.
All three components of the Expectations Index deteriorated. Net expectations for future business conditions fell 3.2 percentage points to -9.5%, net expectations for the labor market declined 3.1 percentage points to -14.4%, and net expectations for household income dropped 3.0 percentage points but stayed positive at +2.5%. Consumers’ 12-month inflation expectations rose 0.3 percentage points, with the average reaching 6.1% and the median 5.1%. The share of consumers expecting higher interest rates over the next year jumped 5.2 percentage points to 68.4%.
What the Decline Signals for Spending
Consumer confidence is closely watched as a leading indicator of household spending, which drives the majority of U.S. economic activity. A sharp drop in the Present Situation Index, combined with weakening expectations for business conditions and employment, suggests households are becoming more cautious about the economy and their own finances — a shift that typically weighs on retail sales and discretionary purchases in the months ahead.
The rise in inflation expectations to 6.1% and the jump in consumers anticipating higher interest rates add pressure, because households expecting tighter budgets and costlier credit tend to postpone large purchases. For retailers and home improvement businesses, the report follows a period in which retail sales had risen for 11 consecutive months through August, and it raises the question of whether that momentum can hold.
Rate Hike and Tensions Shaped the Survey Window
The survey period for September’s preliminary results ran from September 1 to 23, a window that included a federal funds rate hike and ongoing geopolitical tensions, both of which the Conference Board noted as backdrop to the responses.
The decline did not come out of nowhere. Dana M. Peterson, chief economist at The Conference Board, said the index “deteriorated notably in September, following two prior months of softening.” On a six-month moving average basis, confidence trended downward across all age groups and nearly all income groups. Higher-income households remained generally more optimistic, but those earning $125,000 to $149,000 reported the largest decline over the past six months. Consumers still expected stock prices to rise over the next 12 months, though that optimism moderated during the month.
Questions the September Data Leaves Open
The figures published on September 29 are preliminary results, and the Conference Board’s survey window closed on September 23, meaning events in the final week of the month are not reflected. It is not yet clear whether the deterioration represents a turning point in consumer behavior or a temporary reaction to the rate hike and geopolitical news that occurred during the survey period.
The report measures sentiment, not spending itself. While retail sales had risen for 11 consecutive months through August, it remains to be seen whether weakening confidence will translate into slower actual purchases in the coming months, or whether continued income growth expectations will sustain consumption.
Watch Final Figures and October Spending
The Conference Board is expected to release final September figures, which could revise the preliminary readings. Analysts will watch the October confidence survey to see whether the third consecutive decline in expectations extends or reverses, as well as upcoming retail sales and employment data to gauge whether softening sentiment is feeding through to actual spending and hiring.
Future central bank decisions on interest rates will also shape the outlook, given that 68.4% of consumers now expect rates to rise over the next 12 months — a factor likely to influence household borrowing and big-ticket purchases.
Key Questions
How much did consumer confidence fall in September?
The Conference Board Consumer Confidence Index fell 6.7 points to 81.9, down from 88.6 in August, according to preliminary results.
What is the difference between the Present Situation and Expectations indices?
The Present Situation Index reflects consumers’ assessment of current business and labor market conditions, while the Expectations Index captures their short-term outlook for income, business and labor conditions over the next six months.
Why did confidence decline?
According to the Conference Board, more consumers rated business conditions as “bad,” expectations for business conditions and the labor market weakened, and inflation expectations rose. The survey window also included a federal funds rate hike and geopolitical tensions.
Are consumers expecting higher inflation?
Yes. Average 12-month inflation expectations rose 0.3 percentage points to 6.1%, and the median rose to 5.1%. The share of consumers expecting higher interest rates also jumped to 68.4%.
Does lower confidence mean spending will fall?
Not necessarily. Confidence is a sentiment measure, not a direct reading of spending. Retail sales had risen for 11 consecutive months through August. Whether weaker confidence translates into slower spending will become clearer in coming retail sales data.
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