US Consumer Sentiment Hits 47.8, Second Lowest on Record
US consumer sentiment fell to 47.8 in September, the second-lowest level in survey history. Inflation expectations rose to 4.6% as confidence dropped significantly.
US consumer sentiment dropped to 47.8 in September. This is the second-lowest reading in the history of the University of Michigan survey. The all-time low of 44.8 was recorded in May. Economists predicted a higher reading of 51. The Wall Street Journal survey projected 51.4.
Sentiment is now 16% below its February level. This was the month before the start of the Iran conflict. The index is also 13% lower than the level from a year ago. Both Democrats and Republicans saw sizable declines in confidence. Independents showed little change from August.
Inflation Expectations Rise Sharply
One-year inflation expectations increased to 4.6%. This is the highest reading since June. The previous month’s figure was 4.0%. This level exceeds the 3.4% seen in February. It is higher than all readings from 2024.
Long-run inflation expectations ticked up to 3.4%. This ends three consecutive months at 3.3%. These expectations remain above the 2024 range. That range was between 2.8% and 3.2%. Consumers anticipate greater pressure on their pocketbooks.
Business Outlook Remains Stable
Five-year expected business conditions remained stable. These readings are well below their historical average. Consumers believe emerging risks may not worsen the long-run outlook. Year-ahead expectations for personal finances plunged. Expectations for business conditions also plunged.
Fuel prices and trade tensions drive consumer concerns. Joanne Hsu, director of consumer surveys, noted the shift. The survey has been conducted since November 1952. It is a key indicator of US consumer confidence. Source data from GN markets/inflation (en-US) supports these figures.
