Full Breakdown
U.S. Consumer Confidence Hits Decade Low as Prices Surge and Wealthy Spend On
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Core Event: Record-Low Confidence in September
The Conference Board reported its consumer confidence index fell 6.7 points to 81.9 in September, the lowest reading since April 2014. Respondents’ assessment of current conditions dropped to 109.3, and the short-term outlook slipped to 63.6. Write-in responses collected from September 1-23 were dominated by complaints about high gasoline, goods and service costs.
Background & Context
Inflation has persisted for five years, with the consumer price index up 3.4% year-over-year and month-to-month inflation accelerating 0.4% from July. The personal consumption expenditures (PCE) price index was 3.7% higher in June than a year earlier—down from 4.1% in May but still above the 2.8% level before the Iran war began on Feb. 28. Gasoline averages $4.46 per gallon.
Data & Statistics
- Consumer confidence index: 81.9 (Sept.) vs. 88.6 (Aug.)
- Current-conditions rating: 109.3 (Sept.) vs. 117.2 (Aug.)
- Short-term outlook rating: 63.6 (Sept.) vs. 69.5 (Aug.)
- CPI year-over-year: 3.4% (latest month)
- PCE year-over-year: 3.7% (June)
- Unemployment rate: 4.1% (August) after 162,000 jobs added
- Average hourly wage growth: 3.1% year-over-year (weakest since May 2021)
- Top-10% earners: accounted for 45.5% of consumer spending in Q1 2026; wealth-to-income ratio for that group rose to 69% of total household net worth.
Why It Matters / Impact
The plunge in confidence arrives ahead of the midterm elections, raising concerns for President Donald Trump and Republican candidates. Persistent price pressures threaten household budgets, especially for lower- and middle-income families whose real hourly earnings have declined. At the same time, wealthier households are buffering the economy: stock gains enable the top earners to fund consumption, providing a “key tailwind to economic growth” even as broader sentiment sours.
Official Statements & Responses
President Donald Trump has attributed high prices to his predecessor, Democrat Joe Biden, arguing that the administration’s policies are to blame for the cost-of-living squeeze. The Federal Reserve raised the benchmark interest rate by a quarter point to roughly 3.9%, signaling a willingness to hike rates again later in the year. Conference Board chief economist Dana Peterson noted the index’s decline follows two months of softening, marking the first negative view of current business conditions since September 2024.
Criticism & Opposition
Lindsay Owens, head of the Groundwork Collaborative, argues that corporate pricing strategies—bolstered by data-brokerage and AI algorithms—are amplifying the cost-of-living crisis. She calls for a “shoppers’ bill of rights” and legislative action to curb “surveillance pricing” and algorithmic price fixing.
Conflicting Reports & Gaps
Sources differ on the precise inflation trajectory. The CPI shows a 3.4% year-over-year rise, while the PCE index reports 3.7% for June and a prior 4.1% increase in May. Both measures indicate elevated inflation, but the gap highlights uncertainty about underlying price dynamics.
Verbatim Quotes
- “The Consumer Confidence Index deteriorated notably in September, following two prior months of softening,” — Dana Peterson
- “A cost of living crisis is the right time to build the constituency for a revived consumer movement in this country,” — Lindsay Owens
- “Real income growth has been kind of low for a while,” — George Eckerd, wealth and markets research director at JPMorganChase Institute
- “The well-to-do are doing very well and thus spending with gusto and providing the key tailwind to economic growth,” — Mark Zandi, chief economist of Moody’s