September Consumer Sentiment Falls on Price, Job Worries
Consumer sentiment, also known as consumer confidence, measures how U.S. consumers feel about the economy, wages, jobs and their personal finances.
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Senior Editor & Content Strategist Updated on Sept. 30.
University of Michigan: Index declines again
The University of Michigan’s Index of Consumer Sentiment fell in September for the second month in a row, according to the final report for the month released on Sept. 26.
Joanna Hsu, who directs consumer surveys at the University of Michigan, said in the survey release that consumers are frustrated with persistently high prices. Hsu said that 44% of those surveyed mentioned that high prices are eroding their personal finances — the highest reading in a year.
NerdWallet’s senior economist Elizabeth Renter had this to say about the report:
Consumer sentiment has recovered slightly from the levels seen this spring. However, that’s not saying much. Sentiment has been consistently low for the past handful of years. You have to go back to the Great Recession to see economic vibes this bad. Notable this month, the decline in sentiment was felt across demographics — people of most backgrounds are feeling more sour on the current and future economy. An exception: people with large stock holdings. Wealth provides some insulation from perceived economic volatility, and investors have been largely doing OK.
Consumers are attuned to the current economic risks — inflation and labor market weakness. This could be due to first-hand experiences — food prices rose significantly last month — or because they’re on edge from headlines tracking key economic data. In any case, people aren’t feeling great about the economy, their place within it or where it’s all headed.
More findings from the University of Michigan
The University of Michigan Index of Consumer Sentiment’s final reading for September, registered at 55.1, compared to August’s reading of 58.2, according to the first survey released on Sept. 26.
The university’s Index of Current Economic Conditions fell to 60.4 in September, compared to 61.7 in August, while the Index of Consumer Expectations went down to 51.7 in September, compared to 55.9 in August. The Consumer Sentiment Index is now 5.1 points higher than its all-time historic low of 50 in June 2022.
New York Fed: Consumers concerned about finding a job, higher prices
The New York Fed’s Survey of Consumer Expectations for August, released on Sept. 8, shows consumers’ expectations about finding a job fell to a record low since the survey began in 2013.
- Inflation: Median inflation expectations for the next year increased to 3.2% in August from 3.1% in July. The expectation that inflation would increase over the next three years was unchanged at 3% and 2.9%.
- Job security: The likelihood of the unemployment rate rising in the next year increased to 39.1% in August from 37.4% in July. The probability of finding a job fell to 44.9% from 50.7%.
- Personal finance: The expectation for Americans’ household financial situation in the next year was divided: An equally large share of households expect a worse financial situation, as those who expect a better financial situation.
Conference Board: Confidence continues to slide
The Conference Board’s preliminary Consumer Confidence Index report for September (released Sept. 30) fell by 3.6 points from August’s revised figure of 97.8. The Present Situation Index and the Expectations Index also declined.
“Consumer confidence weakened in September, declining to the lowest level since April 2025,” said Stephanie Guichard, a senior economist at The Conference Board, in a press release. “The present situation component registered its largest drop in a year.”
Some key takeaways from the report:
Job, inflation concerns continue. “Consumers’ assessment of business conditions was much less positive than in recent months, while their appraisal of current job availability fell for the ninth straight month to reach a new multiyear low,” Guichard said. She added: “Consumers’ write-in responses showed that references to prices and inflation rose in September, regaining its top position as the main topic influencing consumers’ views of the economy.”
Expectations Index still low. The Expectations Index, based on consumers’ short-term expectations for income, business and the job market, declined by 1.3 points to 73.4. It has now been below 80 since February 2025. Figures below that threshold can signal a coming recession.
More findings from the Conference Board
The Conference Board’s Consumer Confidence Index fell 3.6 points in September’s preliminary report to 94.2, the latest report released on Sept. 30 shows.
The board’s Present Situation Index — measuring consumers’ current assessment of business and labor market conditions — fell 7.0 points to 125.4.
The Expectations Index — measuring consumers’ short-term outlook for income, business and labor market conditions — declined 1.4 points to 73.4. The same index was at 54.4 in April, the lowest level in nearly 14 years.
What is consumer sentiment?
Consumer sentiment, also known as consumer confidence, is an index of how U.S. consumers are feeling about the current and future state of the economy, and all that folds into the economy: the job market, wages, business conditions and their personal finances. It’s a valuable tool for economists, as consumer sentiment can be used as an early predictor of economic changes.
How people feel about the economy can directly impact the economy, because consumers' attitudes often affect how much they spend on things like food, transportation, household goods, entertainment and more.
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In 2023, consumers’ personal spending made up 67.9% of the U.S. GDP, or gross domestic product, according to the Federal Reserve Bank of St. Louis. That’s a significant majority of the nation’s GDP, so keeping a close eye on consumer sentiment is key in foreseeing potential economic slumps or rallies.
When the economy is in a recession, consumer sentiment falls. On the flip side, when the economy is expanding, consumer sentiment rises. The index does typically peak before a recession, though.
Unlike other indexes, such as the Consumer Price Index (CPI), consumer sentiment isn’t calculated using spending data or hard figures. Instead, economists rely on two major surveys of consumer confidence: The University of Michigan’s Surveys of Consumers and the Conference Board’s Consumer Confidence Survey.
Each survey collects the general attitudes and opinions of hundreds of U.S. consumers. Then, those opinions are assigned numeric values and aggregated into one number, or index.
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What is consumer sentiment like right now?
The University of Michigan’s Index of Consumer Sentiment
The final reading for September from the University of Michigan, released on Sept. 26, shows:
- The Index of Consumer Sentiment registered at 55.1 for September, down from 58.2 for August.
- Current Economic Conditions registered at 60.4 for September, down from 61.7 for August
- The Index of Consumer Expectations registered at 51.7 for September, compared to 55.9 for August.
How the University of Michigan creates its index
The Index of Consumer Sentiment is one of three indexes derived from the University of Michigan’s Surveys of Consumers, which started in 1946. Originally conducted annually, the surveys switched to a monthly cadence in 1978. The surveys have a sample size of roughly 600 people selected randomly from the 48 adjoining U.S. states and the District of Columbia.
The surveys include roughly 50 questions covering personal finances, business conditions and buying conditions. From those surveyed, three indexes are produced: the Index of Consumer Sentiment, the Index of Consumer Expectations and the Index of Current Economic Conditions.
The Index of Consumer Sentiment is the most commonly cited index of the bunch. It’s derived from these five questions:
- "We are interested in how people are getting along financially these days. Would you say that you (and your family living there) are better off or worse off financially than you were a year ago?"
- "Now, looking ahead: Do you think that a year from now you (and your family living there) will be better off financially, or worse off, or just about the same as now?"
- "Now, turning to business conditions in the country as a whole. Do you think that during the next twelve months we'll have good times financially, or bad times, or what?"
- "Looking ahead, which would you say is more likely: that in the country as a whole we'll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?"
- "About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or bad time for people to buy major household items?"
Historically, the surveys have been conducted by phone. Starting in July 2024, they'll be conducted online, with researchers aiming for 900 to 1,000 respondents.
The Conference Board’s Consumer Confidence Index
Conference Board preliminary data for September, released on Sept. 30, shows:
- The Conference Board’s Consumer Confidence Index fell 3.6 points to 94.2, from 97.8 in August.
- The Present Situation Index fell 7.0 points to 125.4.
- The Expectations Index fell 1.3 points to 73.4.
The report notes that consumers’ average 12-month inflation expectations fell slightly to 5.8% after a slight rise in August.
How the Conference Board’s Consumer Confidence Index comes together
The Conference Board’s Consumer Confidence Survey was launched in 1967 as a mail survey conducted every other month. Today, the survey is conducted online, on a monthly basis, with a sample size of roughly 3,000 respondents.
The Conference Board issues a five-question survey to calculate three distinct indexes: the Consumer Confidence Index, the Present Situation Index and the Expectations Index. Once the surveys have been completed, each question is given a relative value. Then, those values are compared against their relative values from 1985 — the survey’s benchmark year, with an index set at 100.
The Consumer Confidence Index is the average index for all five questions. The Present Situation Index is calculated using the average indexes for the first two questions, and the remaining three questions determine the Expectations Index.
Present Situation Index
- Respondents’ appraisal of current business conditions.
- Respondents’ appraisal of current employment conditions.
Expectations Index
- Respondents’ expectations regarding business conditions six months hence.
- Respondents’ expectations regarding employment conditions six months hence.
- Respondents’ expectations regarding their total family income six months hence.
Consumer Confidence Index
This is the average index for all five questions above.
The Federal Reserve Bank of New York’s Survey of Consumer Expectations
The highlights for August from the Federal Reserve Bank of New York’s Survey of Consumer Expectations released on Sept. 8 shows:
- Inflation. Median inflation expectations increased by 0.1 percentage point to 3.2% for the one-year ahead horizon, held steady at the three-year horizon (3%) and the five-year horizon (2.9%).
- Commodity prices. Year-ahead price expectations decreased for multiple categories including medical care (down 0.4 percentage point to 8.8%); cost of college (down 0.9 percentage point to 7.8%); and rent (down 1 percentage point to 6%). Expectations for gas (3.9%) and food (5.5%) were unchanged for the third month in a row.
- Home price growth. Median year-ahead home price growth expectations held steady at 3%. Since August 2023, the range has moved between 3% and 3.3%.
- Earnings expectations. Median one-year-ahead expectations for earnings growth went down by 0.1 percentage point to 2.5%, slightly below the 12-month average of 2.8%.
- Unemployment expectations. The mean probability that the unemployment rate will increase a year from now decreased by 1.7 percentage points to 39.1%.
- Probability of job loss. The mean expectation of job loss over the next 12 months went up by 0.1 percentage point to 14.5% — higher than the trailing 12-month average of 14%.
- Probability of quitting. The mean expectation of quitting a job over the next 12 months went down by 0.1 percentage point to 18.9% — just below its 12-month average of 19%.
- Probability of finding a job if job loss occurs. The mean perceived probability of finding a job over the next 12 months dropped by 5.8 percentage points to 44.9% — the lowest in the survey’s history.
- Household income growth. The median expectation of household income growth held steady at 2.9%.
- Household spending growth. Households expect to spend 5% more over the next year, a 0.1 percentage point increase.
Credit access. Fewer households reported that it is easier to get credit now compared to a year ago. But fewer Americans said they expect getting credit will be easier in the next year, compared to last month.
How the Federal Reserve Bank of New York conducts its survey
The Federal Reserve Bank of New York’s Survey of Consumer Expectations focuses on expectations about economic outcomes.
The survey, which is conducted by NielsenIQ, launched in 2013. It’s an internet-based survey that asks a rotating panel of 1,300 heads-of-household about their expectations of the economy, as well as their own personal finances related to the following categories:
Inflation:
- Inflation expectations.
- Inflation uncertainty.
- Probability of different inflation outcomes.
- Home price change expectations.
- Home price change uncertainty.
- Commodity price change expectations.
Labor market:
- Earnings growth expectations.
- Earnings growth uncertainty.
- Job separation expectations.
- Job finding expectations.
- Moving expectations.
- Expectations of higher unemployment.
Household finance:
- Household income growth expectations. Household spending growth expectations. Change in taxes. Change in credit availability. Debt delinquency expectations. Expectations of higher interest rate on savings accounts. Household financial situation.Expectations of higher stock prices. Government debt growth expectations.
When do the next consumer sentiment reports come out?
The University of Michigan’s next set of results for its Surveys of Consumers will be released on Friday, Oct. 10.
The Conference Board will release its next Consumer Confidence Survey on Tuesday, Sept. 30.
The New York Fed will release its next Survey of Consumer Expectations on Tuesday, Oct. 7
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