US consumer confidence dips in October as job and income worries grow

Consumer confidence in the United States fell slightly in October as Americans grew more worried about their future job prospects and income outlook despite modest improvements in current economic conditions.

The Conference Board said Tuesday that its consumer confidence index slipped to 94.6 this month from a revised 95.6 in September.

The decline was modest but disappointed economists, who had expected no change.

One year ago, the index stood at 109.5, underscoring how public sentiment has weakened over the past year.

The index’s short-term Expectations component, which reflects consumers’ views on income, business conditions, and job availability over the next six months, dropped 2.9 points to 71.5 — remaining below the threshold of 80 that typically signals a potential recession.

However, the Present Situation Index rose 1.8 points to 129.3, suggesting that consumers still see the current economy as relatively stable.

"Consumer confidence moved sideways in October, only declining slightly from its upwardly revised September level," said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board.

"Changes to the individual subcomponents were also limited and largely cancelled each other out. The Present Situation Index regained some strength after September's drop. Consumers' view of current business conditions inched upward, while their appraisal of current job availability improved for the first time since December 2024," she added.

"On the other hand, all three components of the Expectations Index weakened somewhat. Consumers were a bit more pessimistic about future job availability and future business conditions while optimism about future income retreated slightly."

Inflation and layoffs weigh on sentiment

The October survey comes on the heels of new data showing inflation remained sticky in September.

Prices rose 3% from a year earlier, up from 2.9% in August, driven by higher gas costs even as rents cooled, according to the Labor Department.

The report — delayed by the October 1 government shutdown — underscored the uneven nature of the US economy.

While growth remains steady, hiring has slowed and several large companies have announced layoffs in recent weeks.

Job growth has softened markedly.

The government’s latest available report showed employers added just 22,000 jobs in August, following 79,000 in July.

Revised figures also revealed that May and June’s numbers were overstated by a combined 258,000 jobs.

The unemployment rate now stands at 4.3%, the highest since 2021.

Federal Reserve policymakers are widely expected to cut interest rates at their upcoming meeting on Wednesday — the second reduction this year — despite inflation remaining above the central bank’s 2% target.

Officials have voiced concern that the labor market, while healthy by historical standards, is losing momentum.

Corporate retrenchment and tariff uncertainty

A series of corporate job cuts has reinforced consumers’ unease.

Amazon announced plans to lay off about 14,000 corporate workers as it shifts resources toward artificial intelligence, while Target said it would eliminate 1,800 positions.

Meta Platforms cut 600 jobs last week, and Starbucks has said it will close hundreds of stores while letting go of nearly 900 non-retail employees.

Economists say the recent hiring slump reflects both the aftereffects of the Fed’s 2022–23 rate hikes and uncertainty surrounding President Donald Trump’s trade and labor policies, including shifting tariffs, immigration crackdowns, and efforts to reduce the federal workforce.

Consumers still spending on cars and household goods

Despite the weaker confidence reading, the share of survey respondents planning to purchase a new or used car rose in October, signaling continued demand for durable goods.

Plans to buy household appliances remained stable from September, while home-buying intentions dipped slightly but have trended upward over the past six months.

Mentions of tariffs in survey responses have declined but remain elevated, reflecting ongoing unease about trade policy.

Inflation continues to top consumers’ list of worries, followed by concerns about job stability and income prospects.

As the year-end holiday season approaches, economists say the consumer sector — which accounts for roughly two-thirds of US economic activity — remains resilient but fragile.

The latest data suggest Americans are willing to spend but are increasingly anxious about what lies ahead in 2026.