Consumer Confidence Falls to 81.9 as Fed Hikes Rates

US consumer confidence fell 6.7 points to 81.9 in September, the Conference Board reported Tuesday, two weeks after the Federal Reserve raised interest rates.

If you run a high-ticket store, two things just moved against you in the same month. Your buyers are more nervous about a $3,000 cart, and the credit card or line of credit that funds your ads and inventory got more expensive. That is the squeeze for the stores we teach at Ecommerce Paradise: thin margins, long consideration cycles, and ad spend that goes out before revenue comes in.

Below: what the Conference Board, the Fed and the University of Michigan each reported, where the counter-evidence sits (Adobe still forecasts 6.7% holiday growth), and what I’d change this week. If you are new to the model, start with my guide to what high-ticket dropshipping is.

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Conference Board Confidence Falls 6.7 Points to 81.9 in September

The Conference Board’s Consumer Confidence Index dropped to 81.9 from 88.6 in August, according to its September release. CFO Dive, which also covered the report, printed 81.8 and called it a 12-year low. I am using the Conference Board’s own figure.

The Present Situation Index fell 7.9 points to 109.3. The Expectations Index fell 5.9 points to 63.6. Dana Peterson, the Conference Board’s chief economist, said the Expectations Index “slipped further into negative territory,” and that business condition assessments turned negative for the first time since September 2024.

Write-in responses leaned on prices and fuel. Peterson said references to prices and fuel costs “rose to new heights, reflecting September’s surge in fuel costs,” per CFO Dive. The survey ran September 1 to 23 and was conducted by Toluna.

The big-ticket detail matters most for us. The Conference Board said auto and home purchase plans both slipped slightly over the next six months. Among durables, furniture and smartphones were the most wanted, while refrigerator and TV spending fell the most.

Households also expect borrowing to cost more. CFO Dive reported that 68.4% of respondents expect higher interest rates, up 5.2 percentage points from August, and that 12-month inflation expectations rose 0.3 points to 5.1%. Heather Long, chief economist at Navy Federal Credit Union, told CFO Dive that consumers are “more disgruntled and squeezed in this economy than during the 2020 pandemic.”

The University of Michigan’s survey points the same way. Its September sentiment index finished at 48.1, down from 51.7 in August, against a Street expectation of 47.5, Yahoo Finance reported on September 25. One-year inflation expectations rose to 4.6% from 4.0%, and five-year expectations edged up to 3.4% from 3.3%. Joanne Hsu, the survey’s director, said worries that “elevated fuel prices and re-escalating trade disputes could pass through to the economy as a whole” drove the drop in business-conditions outlook.

Fed Hiked to 3.75%-4.00% on Sept. 16: How Rates Got Here

The Federal Open Market Committee voted 12-0 on September 16 to raise the federal funds target range to 3.75%-4.00%, per the Fed’s statement. The statement said: “Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal.” It also said job gains “have kept pace with the workforce.”

The prime rate followed. PrimeRates lists prime at 7.00% effective September 17, up from 6.75%, which had held since December 11, 2025. The same page describes the move as the first Fed increase since 2023 and says the next FOMC meeting is October 27-28.

Card APRs start from a high base. Average credit card rates sit just below 21%, according to Yahoo Finance, up from roughly 16% in 2022. PrimeRates puts the cost of the quarter-point move at about $25 a year on a $10,000 variable balance.

There is a real counterpoint on both fronts. John Williams, president of the New York Fed, said after the decision: “With the policy action we took at our September meeting, there is no need for urgency.” CFO Dive reported that traders cut the odds of an October hike from 71% to 47% after his remarks. Fewer hikes is a possibility, not a promise.

Demand has its own counter-evidence. Adobe forecasts $275.1 billion in US online holiday sales for November 1 through December 31, up 6.7% from last year, with furniture at $33.4 billion, up 7.3%, per Retail Dive. Adobe also said shoppers will “stock up on essentials” as economic concerns push them toward value. I covered that forecast in Adobe’s $275B holiday forecast.

The sequence matters. Four releases landed in 14 days: the Fed hike on September 16, Michigan sentiment on September 25, Adobe’s holiday forecast on September 28 and the Conference Board report on September 29. Three of the four point to a squeezed consumer, and the fourth is a forecast of what they will spend anyway.

Fuel is the thread running through all of it. Michigan’s Hsu pointed to fuel prices and trade disputes. The Conference Board’s Peterson pointed to fuel costs. Carriers have been adding fuel and peak surcharges all month, so the same cost shows up in your buyer’s mood and in your freight invoice.

Sources disagree on the tone, not the direction. Adobe projects growth. The Conference Board and Michigan report worse moods. A forecast built in advance and a survey taken September 1 to 23 measure different things, and neither is a verdict on your store.

Rate Hike Plus Weak Confidence: What It Does to a High-Ticket Store

This section is my read, not reporting.

The first hit is financing cost, and it is small per dollar but large in habit. Hypothetical math: a store that carries $50,000 of ad spend and inventory on cards at a 21% APR pays about $875 a month in interest if it never pays the balance down. A quarter-point move adds about $10 a month to that. The hike itself is not the problem. The problem is that most store owners I know treat card float as free, and at 21% it is the most expensive money in the business.

The second hit is conversion on big carts. A nervous household does not stop buying a $3,000 outdoor set or a mobility scooter. It waits, compares three more tabs, and calls a phone number before it pays. That is why my advice on high-ticket Google Ads conversion systems matters more now than it did in August. Clicks are not the constraint, follow-up is.

Hypothetical scenario with thresholds. Say a store does $150,000 a month at a 20% gross margin. If sentiment drags revenue down 7%, that is $10,500 less revenue and roughly $2,100 less gross profit. If the same store also pays $900 a month more in financing and freight costs, it lost about $3,000 of monthly contribution without changing anything it does. That is enough to turn a break-even ad campaign negative.

Now the other side. If Adobe is right and furniture grows 7.3%, categories in home and outdoor may hold up while electronics and big appliances soften, as the Conference Board’s durable-goods detail hints. One month of survey data is not a trend. I would not cut inventory on one report. I would tighten the things I control: float, ad efficiency and follow-up.

Price pressure is the third hit. Retail Dive reported on September 22 that Target cut prices on nearly 2,000 home and apparel products ahead of the holidays. When a big box discounts the same categories you sell, your buyer notices, and a cautious buyer compares harder.

My read: do not chase those cuts. If you sell on authorized-dealer terms with MAP pricing, your edge is service, a real phone number and a supplier relationship the big box cannot match. Discounting below MAP to win one sale can cost you the supplier, which is worth far more than one order.

Freight is the fourth pressure point. Fuel was the loudest write-in theme in the Conference Board survey, and carriers have already moved. See my notes on the FedEx fuel surcharge at 32%.

Peak surcharges stack on top of that, as I covered in UPS and FedEx peak surcharges. If you ship big-and-bulky, my 3PL selection framework helps you price freight into the cart instead of eating it.

Now the rate path. Hypothetical: if the FOMC raises another quarter point on October 28, prime would move to 7.25% and the $50,000 card example above would cost about $21 more a month than it did in August. That is still small. The bigger risk is that a second hike tells your buyers, and your lenders, that the tightening cycle has legs, and both get more cautious at once.

Tariff relief is the one tailwind. The government named 77 Chinese goods for cuts, which I broke down in the tariff cut list. Check your SKUs, because a lower landed cost is the cheapest way to protect margin this quarter.

Payment plumbing also matters when money gets tight. Processor holds and reserves hurt most when cash is thin, which is the case I made in your payment processor is a single point of failure. Disputes rise when buyers feel squeezed, so my chargeback prevention guide is worth a read before peak season.

This is also the moment when store owners who built the whole thing alone feel stretched. If you would rather have a team build and run a high-ticket store while you watch the economy, that is exactly what our turnkey done-for-you service handles.

I am not a financial or legal advisor, and none of this is personalized advice. It is reported information plus how I would think about it as a store owner.

Paying 21% APR to fund ad spend is the quietest leak in your store. See my credit card picks →

Card Balances, Ad Budget and Checkout: Five Moves Before Oct. 28

The next FOMC meeting is October 27-28, so you have about four weeks. Here are five moves, in the order I would do them.

List every card and line of credit with its balance and APR. Anything carrying a balance at 20% or more gets paid down first, before you add new ad spend. If you want a short list of business cards worth applying for, start with my /creditcards page.
Separate ad spend from revolving debt. Open a business credit profile through Nav so you can see what lenders see. My Nav setup walkthrough shows the steps. A 0% intro offer or a lower-rate line beats a 21% card for float.
Put a floor under your campaigns. Pick a minimum return you will tolerate on each Shopping campaign, for example 4x on products with a 25% margin, and cut anything below it for two straight weeks. My guide to turning Google Shopping clicks into sales covers the structure.
Rebuild the abandoned cart flow for carts over $1,000. In Klaviyo, add a flow that sends a plain-text email from a real person and lists your phone number, then have someone call the top carts. My post on high-ticket sales follow-up shows the script logic.
Get a weekly cash view. Connect your store to Finaloop so you see margin after freight and fees, not revenue alone. If you prefer simple invoicing and reports, FreshBooks works too.

If you want a second set of eyes on your numbers, book a call on our discovery page.

If your store runs on Shopify, one more setting is worth a look.

Shopify now lets you set return windows by product, which I covered in the return window overrides post. A longer window on a big item can reassure a nervous buyer, but it also raises your exposure, so set it product by product and keep it tied to what your supplier will actually accept back.

Frequently Asked Questions

Did the Fed raise rates in September 2026?
Yes. The FOMC voted 12-0 on September 16 to raise the target range to 3.75%-4.00%, according to the Fed’s statement.

Does a quarter-point hike raise my card APR right away?
Variable-rate cards follow prime, which moved to 7.00% on September 17 per PrimeRates. The exact timing depends on your card agreement, so check your next statement.

Should I cut inventory because confidence fell?
I would not act on one survey. Adobe still forecasts 6.7% online growth this holiday season, and the Conference Board’s own detail shows furniture among the most wanted durables. Tighten ad efficiency and float first.

What if I pay suppliers or ship internationally?
Compare transfer costs before peak volume. My walkthrough of setting up Airwallex for a cross-border store covers fees. Wise is another option I link for international transfers.

Is a business bank account still worth it?
Yes, and separating finances makes every decision above easier. See the Mercury application walkthrough. The Mercury pricing breakdown shows what the account costs a store.

Which niches hold up when buyers get cautious?
Categories tied to home and outdoor projects are forecast to grow in Adobe’s numbers, but I would pick based on supplier margin too. Grab the free list at my niches page. Then compare it with my high-ticket niches list.

Want 1-on-1 coaching to stress-test your store against a rate hike and a soft consumer? Get the coaching details →

Watch the October 27-28 FOMC meeting and the next Conference Board release. If either surprises, expect a follow-up here. Subscribe to the YouTube channel for daily breakdowns. More breaking news coming through the day.

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Trevor Fenner

Trevor Fenner is an ecommerce entrepreneur and the founder of Ecommerce Paradise, a platform focused on helping entrepreneurs build and scale profitable high-ticket ecommerce and dropshipping businesses. With over a decade of hands-on experience, Trevor specializes in high-ticket dropshipping strategy, niche and product selection, supplier recruiting and onboarding, Google & Bing Shopping ads, ecommerce SEO, and systems-driven automation and scaling. Through Ecommerce Paradise, he provides free education via in-depth guides like How to Start High-Ticket Dropshipping, advanced training through the High-Ticket Dropshipping Masterclass, and fully done-for-you turnkey ecommerce services for entrepreneurs who want a faster, more hands-off path to growth. Trevor is known for emphasizing sustainable, real-world ecommerce models over hype-driven tactics, helping store owners build scalable, sellable, and location-independent brands.