Consumer Sentiment Falls to 47.8 Amid Rising Inflation Fears
The University of Michigan sentiment index dropped 7.5% in September, marking the second-lowest reading since 1952. One-year inflation expectations rose to 4.6% as gasoline prices surged 27.4% year over year.
Consumer sentiment fell to 47.8 in September. This represents a 7.5% decline from the August reading. It is the second-lowest level recorded since 1952. The drop reflects heightened anxiety regarding rising costs. Household finances are under pressure from fuel and trade factors.
Inflation Expectations Reach Six Month High
One-year inflation expectations increased to 4.6%. This is a 0.6 percentage point rise from the prior month. It is the highest level since June. The current conditions index fell 1.9% month over month. The expectations measure dropped 11.1% in the same period.
Fuel Prices Drive Consumer Cost Pressures
Gasoline prices rose 3.9% in August. They are up 27.4% from the same period last year. Fuel oil prices increased 10.1% in the month. Annual fuel oil costs are up 52%. GN markets/inflation (en-US) notes these spikes directly impact household budgets. Trade tensions add further uncertainty to pricing.
Market Odds For Rate Hike Rise
Traders now see a Federal Reserve rate hike as likely. The probability rose past 85% on Friday. This follows BLS data showing annual inflation at 3.4%. This figure is far above the central bank's 2% target. The data confirms that price stability remains elusive.
