Americans’ Confidence in the Economy Hits 12-Year Low

Monthly polling keeps showing Americans think high living costs have put the U.S. economy in the dumps.

The latest comes from The Conference Board, a nonprofit business research group. Its Consumer Confidence Index, based on a monthly survey, measures how Americans feel about current business and job conditions and what they expect over the next six months.

The index fell 6.7 points, from 88.6 in August to 81.9 in September. That’s the lowest reading since 2014, Axios and The Wall Street Journal reported.

"The Consumer Confidence Index deteriorated notably in September, following two prior months of softening," says Dana M. Peterson, the group’s chief economist.

Consumers’ write-in responses about the economy were “mostly pessimistic in September,” Peterson says.

“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,” she says. “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."

The index uses 1985 as its benchmark year, set at 100. It’s one of several recent reports with similar findings.

Downward trend

In mid-September, Debt.com reported the headline “Inflation is Up And Americans Feel Even Worse About the Economy.”

Prices keep climbing. The Consumer Price Index, which the Bureau of Labor Statistics (BLS) uses to track prices of everyday goods and services, rose 3.4% over the 12 months ending in August. Gas prices increased 3.9% in August alone and are up 27.4% from a year earlier.

A similar finding to the Conference Board’s report: Americans expect prices to rise 4.6% over the next year, up from 4.0% in August and the highest since June, according to the University of Michigan’s Surveys of Consumers.

“Year-ahead expectations for both personal finances and business conditions plunged,” Joanne Hsu, the survey’s director, said in September. “With a resurgence in fuel prices and trade tensions, consumers anticipate greater pressures on their pocketbooks to come.”

The job market has held steady

Prices are higher, but the job market has held up.

Job openings were little changed at 7.1 million in August, while hires held at 5.2 million and layoffs and discharges were essentially unchanged at 1.6 million, according to BLS’s latest Job Openings and Labor Turnover Summary.

Consumers aren’t convinced it will last. Over the next six months, they expect both business conditions and the labor market to weaken, according to the Conference Board.

“Consumers still anticipated their household incomes to rise, but less so compared to previous months," the report says.   

Debt.com will continue to track how Americans feel and how the U.S. economy holds up against rising energy prices, stubborn inflation, and trade wars. 

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