The numbers: Escalating trade tensions with China undermined consumer confidence in September, underscoring the dangers of a conflict that has harmed key business sectors such as manufacturing and farming and poses a threat to a record U.S. economic expansion.

The consumer confidence index fell to a three-month low of 125.1 this month from 134.2 in August, the privately run Conference Board said Tuesday.

Economists surveyed by MarketWatch had forecast a 131.1 reading.

The decline puts the index at the lowest level since June and it’s well off the postrecession peak of 137.9 set almost a year earlier.

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What happened: An index that gauges how consumers feel about the present fell sharply. So did a separate survey that projects the next six months.

The so-called expectations index dropped to 95.8 from 106.4, the lowest reading since January.

Those who said jobs are “plentiful” also fell to 44.8% from 50.3%.

Big picture: The trade fight with China has contributed to a sharp slowdown in the global economy, the effects of which have spread to the U.S.

The Federal Reserve has tried to help by cutting interest rates, but business leaders say the uncertainly is unlikely to go away unless the U.S. and China strike a deal or tamp down tensions while they negotiate.

What’s kept the U.S. economy steaming ahead is robust household spending, aided by the strongest jobs market in decades. Consumer confidence is still quite high by historical standards, but it continues to erode the economy could be in trouble.

“With business investment and trade both weighing on the economy, the importance of consumer spending at this juncture can’t be overstated,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

What they are saying: “The escalation in trade and tariff tensions in late August appears to have rattled consumers,” said Lynn Franco, director of economic indicators at the board. “While confidence could continue hovering around current levels for months to come, at some point this continued uncertainty will begin to diminish consumers’ confidence in the expansion.”

Market reaction: The Dow Jones Industrial Average DJIA, +1.33% and S&P 500 index SPX, +1.59% rose modestly in Tuesday trades and closed in on record highs.