US consumer confidence dropped in September to its lowest level since 2014, as people became more pessimistic about the economy and the labor market.
Data released by the Conference Board showed that the consumer confidence index fell 6.7 points to 81.9, while the previous month's reading was also revised lower. The median forecast of economists was 89.
The gauge measuring current conditions declined nearly 8 points to its lowest since 2021, and the measure of expectations for the next six months also fell to its lowest in more than a year.
The report showed that consumers' concerns about the cost of living persisted, including high gasoline prices, and those worries have begun to affect their shopping plans. The share of respondents saying they intended to buy a car, a home and various major appliances declined.
Consumers' expectations for inflation over the next year worsened, and the proportion of respondents expecting interest rates to rise climbed to the highest in more than four years.
The Federal Open Market Committee raised rates earlier this month, and since then several policymakers have said borrowing costs should be increased further.
Pantheon Macroeconomics economists Samuel Tombs and Oliver Allen said in a report: "Although higher energy prices are intensifying inflationary pressures in some areas, real incomes coming under pressure again will be a major drag on economic growth, and the FOMC should remain cautious as it continues to raise rates."
According to AAA data, the Iran war has pushed gasoline prices well above $4 per gallon. US retail diesel prices are near record highs, and heating oil prices have also risen sharply ahead of winter.
Conference Board chief economist Dana Peterson said in a statement: "In the September survey, consumers' responses about factors affecting the economy were mostly pessimistic, and mentions of high prices and the cost of goods and services rose to a new high, with oil and gasoline prices cited especially frequently."
The deterioration in consumer confidence was broad-based, spanning different ages, income groups and regions. So far, however, consumer spending and the labor market have remained resilient despite high inflation.
The Conference Board survey showed that the share of consumers who said jobs were "plentiful" fell to its lowest since 2021, while the share saying jobs were "hard to get" rose. The difference between the two, an indicator economists closely watch, has narrowed to the smallest in five and a half years.
Separate US government data released on Tuesday showed that job openings in August fell to a five-month low.
Consumers' income expectations also worsened in September. The share of respondents expecting their incomes to increase over the next six months fell to the lowest since the start of the year, while the share expecting incomes to decline rose to the highest in more than a year.
The survey was conducted between September 1 and September 23.
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