The Conference Board's Consumer Confidence Index dropped to 98.7, falling from 105.6 in August and missing analyst expectations of 103.8.
The report indicated broad declines in confidence, particularly among consumers aged 35 to 54 and those earning less than $50,000 annually.
The Present Situation Index, which measures consumers' views on current economic conditions, also declined, dropping from 134.6 in August to 124.3 in September.
The Expectations Index, reflecting consumers' outlook for the next six months, pulled back from 86.3 to 81.7, signaling growing concerns about future economic prospects.
Dana M. Peterson, Chief Economist at The Conference Board noted that "the deterioration across the Index’s main components likely reflected consumers’ concerns about the labor market and reactions to fewer hours, slower payroll increases, fewer job openings – even if the labor market remains quite healthy, with low unemployment, few layoffs, and elevated wages."
The weaker-than-expected report impacted financial markets. The U.S. dollar index tested session lows, as it hovered around the 100.60 level in response to the data.
Meanwhile, gold prices hit a new high of $2,640, with investors turning to the precious metal amid the U.S. dollar’s pullback and heightened geopolitical tensions.
