US Consumer Confidence Dips as Worries Over Economic Future Grow
The Conference Board's October index edged down to 94.6, as pessimism about the job market and business conditions overshadowed a more positive view of the present.
US consumer confidence posted a slight decline in October, as mounting concerns about the future of the economy and the labor market outweighed a more sanguine view of current conditions. The data suggests American households are growing more cautious, a potential headwind for consumer spending heading into the crucial holiday season.
The Conference Board reported Tuesday that its Consumer Confidence Index fell to 94.6 this month, a modest drop from September’s upwardly revised figure of 95.6. While the reading came in slightly ahead of some economists' forecasts, the underlying details of the report point to a growing unease among consumers about what lies ahead.
The divergence was most evident in the report's two main sub-indices. The Present Situation Index, which measures consumers' assessment of current business and labor market conditions, actually rose to 129.3 from 127.5. However, the Expectations Index, which gauges the short-term outlook for income, business, and employment, fell to 71.5 from 74.4. According to The Conference Board, a reading below 80 for the Expectations Index has historically signaled a potential recession within the next year, a threshold the index has remained under since early 2025.
“Consumer confidence moved sideways in October, only declining slightly from its upwardly revised September level,” Stephanie Guichard, Senior Economist at The Conference Board, noted in the official release. She added that write-in responses showed that persistent inflation remains a primary concern for households.
This sentiment of near-term stability but long-term anxiety aligns with other recent economic readings that paint a mixed picture. While the job market has remained resilient and wage growth steady, consumers are still grappling with the cumulative impact of high prices for everyday goods and services. The October report showed a slight retreat in optimism about future income, alongside increased pessimism regarding future job availability.
The data comes at a critical time for the Federal Reserve, which is closely monitoring economic indicators for signs of slowing momentum as it weighs its next move on interest rates. While officials, including Chair Jerome Powell, have previously noted a “poor correlation” between consumer confidence and actual spending, a sustained downturn in sentiment could eventually translate into more conservative household spending, which accounts for roughly two-thirds of U.S. economic activity.
Some analysts believe the persistent gap between how consumers feel about the present versus the future highlights a fragile foundation for economic growth. The University of Michigan’s Surveys of Consumers, another key sentiment gauge, also pointed to similar concerns in its latest report, hitting a five-month low in October.
As the fourth quarter unfolds, investors and policymakers will be watching closely to see if consumers’ actions align with their anxieties. A pullback in spending could signal a broader cooling of the economy, while continued resilience would suggest that strong labor market conditions are still winning out over worries about the future.