Key takeaways:

• The Consumer Confidence Index fell to 94.2 in September, its lowest since April
• Despite consumer unease, stock markets continue to edge higher, reflecting cautious optimism
• Confidence is up among people under age 35 and households earning $35k–$200k, but down in other groups
• Plans to buy cars and take vacations dropped, while home purchase intentions hit a four-month high
• Even with short-term jitters, 58% of Americans still believe they’ll achieve financial success in their lifetime

Consumer confidence cooled in September, with Americans citing concerns about prices and the job market. Sentiment varied across demographics, with younger adults and middle-income households feeling more secure than others. While intentions to spend on cars and travel fell, homebuying interest rose, and many Americans continue to budget carefully, indulge in small luxuries, and maintain long-term optimism about their financial future.

Americans’ confidence in the economy dipped last month, with The Conference Board’s Consumer Confidence Index falling from 97.8 in August to 94.2 in September.¹ The decline marks the weakest showing since April when a sweeping tariff policy was announced, and is the largest drop in a year — signaling uneasiness about prices and a cooling job market.²

Despite consumer perceptions, stocks continued to edge up in recent weeks, indicating Wall Street may remain optimistic that the U.S. economy will avoid a recession.³

While both the Present Situation and Expectations indices also fell to 125.4 and 73.4, respectively, overall consumer optimism about future income increased, with confidence rising for those under age 35, and slipping among the 35 and over cohort.⁴ The picture was mixed based on income, with people earning between $35,000-$200,000 continuing to be more confident than they were in April, and those outside those income levels feeling less so.

Read more: Job market cools after modest August gains

Data snapshot

Consumer plans to purchase cars and take vacations both declined in September from August, while intention to buy big-ticket items was largely unchanged. At the same time, home purchase plans ticked up, reaching a four-month high.

Other month-over-month sentiments include:⁵

• 19.5% say business conditions are “good,” down from 21.8%
• 26.9% think jobs are “plentiful,” compared with 30.2%
• 22.3% expect business conditions to worsen, relatively flat from 23.5%
• 25.6% anticipate fewer jobs, down slightly from 25.9%
• 17.6% expect incomes to increase, compared with 18.8%

Shifting behaviors

As economists and market watchers debate what’s to come, Empower findings reveal some clues showing up in behaviors from gift-giving to tipping habits. Some Americans are taking a thoughtful approach to budgeting, with more than half saying they set aside a dedicated budget for gift-giving (58%) or buy gifts ahead of time to spread out costs (56%).

Emotions can play a major role in everyday spending, and the “lipstick effect” — the idea that consumers turn to small luxuries in hard times — could be at play, with spending on small luxuries like coffee holding steady, and beauty products and gym memberships on the rise.

Read more: Going rate

Money mindset

Though views on Family’s Current and Future Financial Situation weakened in September, many Americans may still take a long-term view: More than half (58%) saying they believe they’ll achieve financial success in their lifetime despite hurdles, according to Empower research.