Consumer Confidence Falls to Its Lowest Level Since 2014: What It Says About Prices, Jobs and Your Budget

Americans feel worse about the economy than they have in 12 years, and their worries about prices and jobs are the same ones hitting many household budgets.

A closely watched survey of how Americans feel about the economy took a sharp turn down this month. The Conference Board, a business research group, said on Tuesday, September 29, that its Consumer Confidence Index fell to 81.9 in September. That is down 6.7 points from 88.6 in August and the lowest reading since 2014.

Economists polled by Reuters had expected a reading of 89.2, so the drop was a surprise. Here is what the survey found and what it could mean for your money.

What the survey measures

The Consumer Confidence Index is built from a monthly survey that asks people how they feel about business conditions, jobs and their income, both right now and six months from now. A reading of 100 matches how people felt in 1985, the survey's base year. Lower numbers mean people feel less sure about the economy.

The index has two parts:

• Present Situation Index: how people feel about things today. It fell 7.9 points to 109.3.
• Expectations Index: how people feel about the next six months. It fell 5.9 points to 63.6, its third monthly drop in a row.

The Conference Board's chief economist, Dana M. Peterson, said the index "deteriorated notably in September." She also noted that people's written-in comments about the economy "were mostly pessimistic."

Worries about jobs are growing

The survey asks whether jobs are "plentiful" or "hard to get." In September, 23.6% of people said jobs were plentiful, down from 24.5% in August. The share saying jobs were hard to get rose to 21.9% from 20.3%.

Looking ahead, fewer people expected more jobs to be available in six months (14.0%, down from 14.8%), and more expected fewer jobs (28.4%, up from 26.1%).

People also felt less hopeful about their paychecks. The share expecting their income to rise over the next six months slipped to 17.9%, while the share expecting it to fall rose to 15.4%.

People expect prices and rates to keep climbing

Inflation, which means prices rising over time, is still a big worry. On average, people said they expect prices to rise 6.1% over the next 12 months, up 0.3 points from August. The median answer, which is the middle answer when all responses are lined up, was 5.1%.

The share of people who expect interest rates to go up jumped 5.2 points to 68.4%. That matters because higher rates make it more expensive to carry a credit card balance, take out a car loan or buy a home.

What this means for your wallet

A confidence survey does not change your bills by itself. But it can be an early sign of how people plan to spend, and it shows that many households are feeling the same squeeze. Here are a few ideas that may help if you are feeling uneasy too:

• Look at your own numbers, not the headlines. A quick review of what came in and what went out last month can show you exactly where you stand. That is often calmer than guessing.
• Consider building a cushion. When people worry about jobs, an emergency fund, which is money set aside only for surprises like a job loss or car repair, can make a big difference. Even a small amount saved each payday adds up.
• Watch variable-rate debt. If most people expect rates to rise, balances with rates that can change, like most credit cards, could get more expensive. Paying these down first may save you interest.
• Plan big purchases carefully. If you are thinking about a major purchase, it may help to compare prices, check financing costs and make sure the payment fits your budget even if prices keep rising.
• Keep your skills fresh. If you are worried about your job, updating your resume and learning new skills can give you more options.

Remember that surveys like this show how people feel, which can change quickly. They are one piece of the picture, alongside hard data like job openings and inflation reports.