The confluence of soaring costs of gas and food and sagging consumer confidence is further deteriorating the environment for dealerships and finance companies.

That’s one conclusion to be drawn from the analysis recently provided by Cox Automotive, Fifth Third Bank and the Conference Board.

“With the third quarter closed and the fourth underway, the story is not any single data point. It is how the economy and auto market connect, and what those connections mean for decision-making,” Cox Automotive chief economist Jeremy Robb wrote on Monday in his Auto Market Weekly Summary.

The consumer base for those decisions is wobbling, based on what the Conference Board determined.

The Conference Board Consumer Confidence Index fell by 6.7 points to 81.9 in September, down from 88.6 in August.

The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — retreated by 7.9 points to 109.3.

The Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — fell by 5.9 points to 63.6, its third consecutive monthly decline.

Analysts mentioned the survey period for this month’s preliminary results was Sept. 1-23, which included a federal funds rate hike and ongoing geopolitical tensions.

“The Consumer Confidence Index deteriorated notably in September, following two prior months of softening,” said Dana Peterson, who is chief economist with the Conference Board. “The Present Situation Index fell sharply, while the Expectations Index slipped further into negative territory.

“Consumer appraisals of current business conditions became negative for the first time since September 2024,” Peterson continued in a news release. “Perceptions of the current labor market also worsened, though remained within positive territory. Over the next six months, consumers expected both business conditions and the labor market to weaken. Consumers still anticipated their household incomes to rise, but less so compared to previous months.”

Peterson also touched on another information source the Conference Board incorporated into its newest update.

“Consumers’ write-in responses regarding factors affecting the economy were mostly pessimistic in September,” Peterson said. “References to prices, the high cost of goods and services, and oil and gas prices in particular, rose to new heights, reflecting September’s surge in fuel costs.

“Comments about war/conflict eased this month but remained elevated. Consumers also frequently cited politics, trade, and employment in their write-in responses, though to a lesser extent,” Peterson added.

Robb recapped those consumer sentiments, too, and then tied them back to what they’re doing to the car business.

“Diesel prices remained near all-time highs, and that cost is starting to show up where it matters for dealers: wholesale valuations at Manheim,” Robb wrote in his online analysis. “The swift and persistent rise in gas prices, driven by the conflict in the Middle East, has pushed consumer expenses much higher this year, with no clear sign of relief.

“Large truck and SUV values have declined over the past couple of months, while electric vehicle values have held steadier as consumers shop for fuel-efficient options. Our research shows a clear pattern: Vehicles with the worst fuel economy are depreciating fastest, while vehicles rated above 40 mpg are holding or even gaining value,” he continued.

“Those valuation shifts are a symptom of a larger consumer story: How long can spending keep outpacing income? The gap has widened for months, funded in large part by growth in financial assets rather than paychecks,” Robb went on to write. “But that gap could become harder to sustain if energy costs remain elevated and the conflict in the Middle East remains unresolved.”

Robb also mentioned the chance the Federal Reserve will push interest rate higher this month has dropped significantly; with a 76% probability the funds rate will remain unchanged.

Another important trend policymakers will consider will be the job market, which was recapped on Tuesday by Bill Adams, who is chief U.S. economist with Fifth Third Bank.

When looking at the September data, Adams wrote, “The unemployment rate edged up to 4.2% from 4.1%, although the increase was only 0.03 percentage point before rounding (To 4.17% from 4.14%). The labor force participation rate rose two tenths of a percent, lifted by more workers between 16 and 54 years of age, while the rate for those 55 and older fell to the lowest since 2005. The unemployment rate has changed little since the start of the year, a sign that job creation is keeping up with new jobseekers.

“Wage growth was another soft spot in September, slowing to the weakest year-over-year increase since the post-pandemic expansion took off, implying that workers have limited opportunities to move up to better-paying jobs,” Adams added.

Better pay could certainly lift consumer sentiments, which also might push an individual to finance a car purchase.

As Robb previously stated, it’s not just a single data point propelling the market.

“The economy continues to evolve rapidly, with AI reshaping the business landscape as demographics shift and baby boomers retire at a record pace,” Robb wrote. “As year-end approaches and 2027 planning begins, the task is to understand how financing costs, energy prices, consumer balance sheets, AI-driven productivity and a changing labor force will work together in an increasingly complex marketplace.”