Consumer confidence slipped slightly in October, marking the third consecutive monthly decline, though Americans showed modest improvement in their views of current economic conditions even as concerns about the future intensified, according to data released Tuesday by the Conference Board.
The Consumer Confidence Index fell 1.0 point to 94.6 in October from an upwardly revised September reading of 95.6. The index now stands at its lowest level since April 2025.
“Consumer confidence moved sideways in October, only declining slightly from its upwardly revised September level,” said Stephanie Guichard, Senior Economist at The Conference Board. “Changes to the individual subcomponents were also limited and largely cancelled each other out.”
Present Conditions Improve, But Future Expectations Weaken
The Present Situation Index, which measures consumers’ assessment of current business and labor market conditions, rose 1.8 points to 129.3 in October. This gain reflected improved views of both current business conditions and job availability.
Notably, consumers’ appraisal of current job availability improved for the first time since December 2024. Some 27.8 percent of consumers said jobs were “plentiful,” up from 26.9 percent in September, while 20.2 percent said business conditions were “good,” up from 19.9 percent.
However, the Expectations Index, which measures consumers’ short-term outlook for income, business, and labor market conditions, declined 2.9 points to 71.5. The index has remained below 80 — a threshold that typically signals a recession ahead — since February 2025.
The divergence between improving present conditions and deteriorating future expectations suggests growing uncertainty about the economic trajectory and likely adds pressure on the Federal Reserve to continue cutting interest rates as it seeks to support the economy ahead of potential weakness.
Labor Market Concerns Persist
Despite the improvement in current job availability perceptions, consumers expressed heightened worry about future employment prospects. Only 15.8 percent of consumers expected more jobs to be available in six months, down from 16.6 percent in September, while 27.8 percent anticipated fewer jobs, up from 25.7 percent.
The cautious outlook comes amid recent announcements of major layoffs from companies including Amazon and UPS, and follows weak employment data from August that showed just 22,000 jobs added.
The share of consumers who think a recession is very likely over the next 12 months declined slightly in October. However, the share of consumers believing the economy was already in recession increased for a third straight month.
Consumer assessments of their families’ current and future financial situations both improved in October after September’s decline, though views of current financial situations remained below their average level for 2025.
Inflation and Political Concerns
Consumers’ write-in responses continued to be dominated by references to prices and inflation as the main topic influencing economic views. References to tariffs declined further but remained elevated. The write-in comments remained mostly negative overall, though less so than in previous months.
References to U.S. politics were up notably, with the ongoing government shutdown mentioned multiple times as a key concern.
Consumers’ average 12-month inflation expectations inched up to 5.9 percent in October from 5.8 percent in September. Meanwhile, 52.8 percent of consumers expected interest rates to rise, up from 51.1 percent in September.
Spending Plans Show Mixed Picture
Purchasing plans for cars increased in October, driven by plans to buy used vehicles. Plans to buy big-ticket items remained little changed overall, though they have started to pick up after weakening earlier in the year.
Purchasing plans for homes weakened for the month, though the six-month trend remains upward.
Consumers’ intentions to purchase services rose after September’s pullback, driven by pet care, streaming and internet services, and motor vehicle services. Travel plans were also up, matching an increase in vacation intentions, which may be poised for recovery after hitting lows earlier in the year.
Holiday Spending Expected to Decline
Preliminary data suggest consumers’ holiday spending will be down this season compared to last year. Consumers expect to spend 3.9 percent less on gifts and 12 percent less on non-gifts, both in nominal terms.
When asked what will drive their spending decisions over the upcoming holidays, consumers most frequently cited promotions and getting the most out of every dollar.
Some consumers also indicated they will likely buy fewer goods if the price of imported items is inflated by tariffs. While some consumers started holiday shopping as early as the first quarter of 2025, there was little evidence of advance purchasing ahead of tariffs, according to the Conference Board Most purchases are expected to take place between October and the end of the year, with November seeing the largest share of planned spending.
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