Consumer confidence broadly deteriorated in September as outlooks on current economic conditions fell sharply and outlooks on future conditions continued to weaken.

The Conference Board’s Consumer Confidence Index declined 6.7 points to a reading of 81.9, exacerbating a summertime slump in the index, which has now softened for three consecutive months.

The component index gauging consumer perceptions of current business and labor market conditions fell 7.9 points to 109.3. Meanwhile, the Expectations Index — which tracks sentiment on forward-looking business, labor and income conditions — slid 5.9 points to 63.6.

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Perspectives on current business conditions fell into negative territory for the first time since September 2024, noted Dana Peterson, chief economist at the nonprofit think tank and research group, in commentary accompanying the survey findings.

“Perceptions of the current labor market also worsened, though remained within positive territory,” said Peterson.

Survey responses were collected from Sept. 1 through 23. During that period, the Federal Reserve raised its benchmark interest rate for the first time in three years, while strongly signaling that additional interest rate hikes would likely be necessary to tackle accelerating inflation.

Despite the Fed signaling its seriousness to get inflation under control, however, consumers’ median year-ahead inflation expectations increased 0.3 percentage points to 5.1%. The share of consumers who said they anticipate higher interest rates over the next year jumped by 5.2 percentage points from August to September to land at 68.4%.

Across the broader economy, consumers in September also continued to feel the impacts of the ongoing Iran war, nearing the end of its seventh month. Cooling hostilities in June and July flared again in August and September, sending energy prices soaring and dashing optimism for a near-term resolution to the conflict.

“References to prices, the high cost of goods and services, and oil and gas prices in particular, rose to new heights, reflecting September’s surge in fuel costs,” said Peterson of consumers’ write-in responses.

The share of consumers who reported their family finances were “bad” exceeded those who said they were “good” for only the second time since the question was introduced four years ago. On the housing front, consumers’ reported homebuying plans weakened slightly on a six-month moving average basis.

“Over the next six months, consumers expected both business conditions and the labor market to weaken,” concluded Peterson. “Consumers still anticipated their household incomes to rise, but less so compared to previous months.”