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The Conference Board Consumer Confidence Index fell 6.7 points to 81.9 in September, with both current conditions and short-term expectations weakening. Inflation expectations rose to 6.1% on average and 68.4% of consumers expect higher interest rates.
The Conference Board Consumer Confidence Index fell by 6.7 points to 81.9 in September, down from 88.6 in August, according to preliminary results published September 29, 2026 and reported by Hardware Retailing. The decline — the latest in a series of softening readings — was broad-based, hitting consumers’ assessments of both current business and labor market conditions and their outlook for the next six months. The survey period, September 1–23, coincided with a federal funds rate hike and ongoing geopolitical tensions.
The Present Situation Index, which tracks consumers’ assessment of current business and labor market conditions, dropped 7.9 points to 109.3. The Expectations Index, reflecting the short-term outlook for income, business and labor market conditions, fell 5.9 points to 63.6 — its third consecutive monthly decline, according to the report.
The deterioration was visible in the underlying components. Net views of current business conditions — the share describing conditions as “good” versus “bad” — fell 3.4 percentage points to –1.9%, a reading the Conference Board attributed largely to more consumers saying conditions are “bad.” The labor market differential, which compares the share saying jobs are “plentiful” with the share saying jobs are “hard to get,” retreated 2.5 percentage points to +1.7%.
Forward-looking measures weakened as well. Net expectations for business conditions over the next six months dipped 3.2 percentage points to –9.5%, and net labor market expectations declined 3.1 percentage points to –14.4%. Net expectations for household income fell 3.0 percentage points but stayed positive at +2.5%. On a six-month moving average basis, confidence declined across all age groups and nearly all income groups, with households earning $125,000–$149,000 reporting the steepest drop. Inflation expectations also ticked up: average 12-month inflation expectations rose 0.3 percentage points to 6.1%, and the share of consumers anticipating 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 gauge of household willingness to spend, and a broad-based decline can foreshadow softer retail demand. The report is particularly relevant for retailers and home improvement sellers: consumers expecting weaker business conditions, a softer labor market and higher borrowing costs often postpone discretionary purchases and larger projects. The rise in inflation expectations, alongside the 68.4% of consumers expecting higher interest rates, points to added pressure on household budgets and financing-sensitive purchases. The fact that the drop spans nearly all income groups suggests the pullback in sentiment is not confined to lower-income households, though higher-income groups remained generally more optimistic.
A Third Month of Declining Expectations
September’s decline followed two prior months of softening in the headline index, according to the Conference Board’s chief economist. The Expectations Index has now fallen for three straight months. The survey period — September 1 through 23 — overlapped with a federal funds rate hike and ongoing geopolitical tensions, both of which can weigh on household sentiment. Separately, Hardware Retailing noted that August retail sales had risen modestly, marking an 11th consecutive month of gains, indicating that actual spending had held up even as sentiment weakened in preceding months.
What the September Data Does Not Show
The figures released are preliminary results, and the report does not establish how much of the decline was driven specifically by the rate hike or geopolitical tensions versus other factors. It also remains unclear whether the weakening sentiment will translate into an actual slowdown in spending, since retail sales had continued rising through August even as confidence softened. The Conference Board did not attribute the income-group differences to specific causes, and no data in the report covers spending behavior after September 23.
Upcoming Confidence and Spending Data
Final September results from the Conference Board, along with the October Consumer Confidence Index, will show whether the September drop was a one-time deterioration or the start of a steeper trend. Retail sales figures for September and October will test whether weakening sentiment is beginning to affect actual spending after 11 consecutive months of gains through August. Further Federal Reserve decisions on interest rates — and whether they match the 68.4% of consumers expecting higher rates — will also shape the outlook.
Key Questions
How much did the Consumer Confidence Index fall in September?
The Conference Board Consumer Confidence Index fell by 6.7 points to 81.9 in September, from 88.6 in August, according to preliminary results.
Why did consumer confidence decline?
According to the report, consumers’ assessments of current business conditions turned negative and labor market perceptions softened, while expectations for business conditions, the labor market and household income all deteriorated. The survey period also included a federal funds rate hike and ongoing geopolitical tensions, though the Conference Board did not quantify their impact.
What are consumers’ inflation expectations?
Average 12-month inflation expectations rose 0.3 percentage points to 6.1%, with the median at 5.1%. The share expecting higher interest rates over the next 12 months rose 5.2 percentage points to 68.4%.
Which income groups saw the biggest decline?
On a six-month moving average basis, confidence trended downward across all age groups and nearly all income groups. Households earning $125,000–$149,000 reported the greatest decline over the last six months, though higher-income groups remained generally more optimistic.
Does weaker confidence mean spending will fall?
Not necessarily. Retail sales had risen for 11 consecutive months through August even as sentiment softened. The report does not show whether the September decline in confidence will affect actual household spending in the months ahead.
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