US consumer confidence falls to lowest level in more than a decade

US consumer confidence fell to its lowest level in more than a decade in September as Americans remained concerned about elevated prices, stagnant wages and the economic effects of the ongoing Iran war. The Conference Board said its consumer confidence index dropped 6.7 points to 81.9, from 88.6 in August. It was the survey’s lowest reading since April 2014 and below the low recorded during the pandemic.

Views of the present economic situation declined 7.9 points to 109.3, while the measure of consumers’ short-term expectations fell 5.9 points to 63.6. The survey collected responses between September 1 and 23. Dana Peterson, the board’s chief economist, said confidence had deteriorated notably after weakening in the previous two months.

She said consumers’ assessment of current business conditions had become negative for the first time since September 2024. Survey responses frequently referred to the cost of petrol, goods and services. The source material says the consumer price index rose 3.4 per cent in August from a year earlier, while prices increased 0.4 per cent from July.

The Federal Reserve raised its benchmark interest rate by a quarter point two weeks ago, to about 3.9 per cent, in an effort to contain persistent inflation. The central bank indicated another increase could come later in the year, potentially adding to borrowing costs for mortgages, vehicles and credit cards. The labour market also appeared less reassuring to consumers, although their views remained positive overall.

Employers added 162,000 jobs in August and unemployment stayed at 4.1 per cent, but average hourly wages rose 3.1 per cent year on year, the weakest increase since May 2021. The confidence figures could pose a challenge for President Donald Trump and Republicans ahead of midterm elections due in a little over a month. The government was due to release August personal consumption expenditure data and the September jobs report later in the week.