US consumer sentiment weakens; recession fears persist: TCB

The Conference Board (TCB) Consumer Confidence Index has declined for the second consecutive month in September 2025, falling by 3.6 points to 94.2 (1985=100) from August’s 97.8.

The Present Situation Index dropped by 7 points to 125.4, reflecting worsening assessments of current business and labour market conditions. The Expectations Index eased by 1.3 points to 73.4, remaining below the recession-signal threshold of 80 since February 2025, TCB said in a release.

Confidence rose among consumers under 35 but fell for those above 35. Income-based results were mixed, with all cohorts except households earning $25K–$35K and those above $200K still above April lows. By political affiliation, confidence improved slightly for Republicans and Democrats but fell sharply among Independents.

Mentions of jobs and employment in write-in responses surged to the highest since August 2024, mostly negative in tone. Consumers were less upbeat about the labour market: only 26.9 per cent said jobs were ‘plentiful,’ down from 30.2 per cent in August, while 19.1 per cent said jobs were ‘hard to get.’ Business conditions were also viewed more negatively, with 19.5 per cent calling them ‘good’ (down from 21.8 per cent) and 15.4 per cent ‘bad’ (up from 14.6 per cent).

"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. References to tariffs declined this month, but remained elevated and continued to be associated with concerns about higher prices. Nonetheless, consumers' average 12-month inflation expectations inched down, to 5.8 per cent in September from 6.1 per cent in August. This is still notably above 5.0 per cent, the level at the end of 2024," Guichard added.

Consumers’ assessments of their current financial situation saw the steepest one-month decline since this measure began in July 2022. Expectations for future finances also weakened. The share of consumers seeing a recession as ‘very likely’ rose slightly to the highest since May, with more also believing the economy is already in recession.

Looking six months ahead, 18.7 per cent of consumers expected business conditions to improve (down from 20.2 per cent), while 22.3 per cent expected them to worsen (down from 23.5 per cent). Labour market outlooks softened, only 16.1 per cent expected more jobs, down from 17.9 per cent. Income prospects were mixed, with 17.6 per cent expecting increases and 11.7 per cent expecting declines.

The data cutoff was September 21, 2025.

ALCHEMPro News Desk (HU)