US Consumer Confidence Hits 2014 Low as Fuel Costs and Iran War Drive Pessimism

Key points

• The Conference Board’s Consumer Confidence Index fell 6.7 points to 81.9 in September, marking the lowest reading since April 2014 and missing the Dow Jones consensus forecast of 89.
• For the first time in the survey’s four-year history, more respondents reported their personal finances were 'bad' rather than 'good,' with the Present Situation Index dropping 7.9 points to 109.3.
• Rising fuel costs were a primary driver of pessimism; the average US gas price jumped 37 cents in a month to $4.45 per gallon, according to the American Automobile Association.
• Inflation expectations rose, with the average expected rate increasing by 0.3 percentage points to 6.1%, while the median expectation also climbed to 5.1%.
• Job openings declined to 7.08 million in August, down 256,000 from the previous month, though hires edged higher and layoffs slipped slightly, indicating a mixed labor market.
• The University of Michigan’s consumer sentiment index also fell 7% in September to its second-lowest reading on record, corroborating the Conference Board’s findings.

Background

This decline follows a trend of weakening consumer sentiment observed in earlier 2026 reports. In September, the University of Michigan index had already hit near-record lows, and gas prices had been climbing nationwide, with the national average reaching approximately $4.44 per gallon in mid-September. The current drop coincides with the Federal Reserve’s first interest rate hike in three years, which increased borrowing costs, and occurs just over a month before the US midterm elections.

How outlets are covering it

CNBC and The Washington Post both highlight the severity of the drop, with The Post noting that Americans feel worse about the economy than during the pandemic. Al Jazeera emphasizes the political implications, noting that confidence fell across all political affiliations and that a Marist poll shows 42% of consumers believe Democrats would handle the economy better than Republicans. ABC News focuses on the stagnation of wages amid elevated prices and the ongoing Iran war. While all outlets agree on the sharp decline, CNBC and The Washington Post place greater emphasis on the specific metrics of the Conference Board index, whereas Al Jazeera and ABC News contextualize the drop within the broader political and geopolitical landscape, including the Iran conflict and trade battles with Canada.

Why it matters

The plunge in consumer confidence signals a potential slowdown in spending, which could impact economic growth and corporate earnings. With the midterm elections approaching, the deteriorating sentiment poses a risk to President Donald Trump and Republicans, as voters may blame the administration for high prices and stagnant wages. The Federal Reserve’s upcoming decision on interest rates in late October will be influenced by these consumer trends and inflation data, potentially affecting mortgage rates and credit costs for households.

What to watch

The Federal Reserve is set to make another interest rate decision at its October 27-28 meeting, which will likely be influenced by the latest consumer confidence and inflation data. Economists, such as Grace Zwemmer of Oxford Economics, expect the pace of consumer spending to slow over the next few quarters as high gasoline prices continue to weigh on disposable income. The midterm elections, occurring in less than a month, will test the political impact of this economic pessimism.