Inflation continues to be a significant source of anxiety for Americans, as consumer confidence dipped for a third straight month in October.
The Conference Board's index declined to 102.6 last month, down from an upwardly revised 104.3 in September, data released on Tuesday showed.
The index gauges consumers' confidence in current economic conditions as well as their expectations for the next six months.
Views of current economic conditions fell to 143.1, the lowest level this year. Short-term outlook was again below 80, meaning consumers are fearful of an oncoming recession.
“Write-in responses showed that consumers continued to be preoccupied with rising prices in general, and for grocery and gasoline prices in particular,” said Dana Peterson, chief economist at the Conference Board.
Consumers were also concerned about the “political situation” and higher interest rates, she added.
Tuesday's data shows that consumers remain gloomy about the economic climate despite recent positive data.
The US economy grew by 4.3 per cent last quarter, headline inflation has fallen to 3.7 per cent and a strong labour market has made economists revisit their recession predictions.
“The continued scepticism about the future is notable given US consumers – at least through the third quarter of this year – continued to spend heavily on both goods and services,” Ms Peterson said.
Nevertheless, uncertainty and high prices continue to hold a grip on consumer fears.
Officials at the Federal Reserve have indicated that interest rates – currently at 5.4 per cent – will remain higher for a longer period of time because of strong economic growth. Higher Treasury yields are also making borrowing more expensive.
US consumers also grew more fearful of geopolitical conflicts amid the Israel-Gaza war. Federal officials do not believe it will significantly affect consumers, however.
Treasury Secretary Janet Yellen said she has not seen the war affect the economy so far. Fed Chairman Jerome Powell said that while such geopolitical conflicts “pose important risks to global economic activity”, he does not expect it to be something that will influence monetary policy decisions.