US Consumer Sentiment Surges in September

The University of Michigan's consumer sentiment for the US jumped to 100.8 in September of 2018 from 96.2 in August, beating market expectations of 96.7. It is the second highest level since 2004, only behind the March 2018 reading of 101.4, preliminary estimates showed. Expectations were the strongest since July of 2004, largely due to more favorable prospects for jobs and incomes and current conditions were also assessed more favorable.

The current economic conditions sub-index rose to 116.1 from 110.3 in August and the gauge measuring consumer expectations increased to 91.1 from 87.1.

Inflation expectations for the year ahead edged down to 2.8 percent from 3 percent and the 5-year outlook for inflation also fell to 2.4 percent from 2.6 percent. 

Despite a lessening of expected gains in nominal incomes in September, inflation expectations also declined, acting to offset concerns about declining living standards. Consumers anticipated continued growth in the economy that would produce more jobs and an even lower unemployment rate during the year ahead. While consumers were somewhat more likely to anticipate that the economic expansion would continue uninterrupted over the next five years, nearly as many expected another downturn sometime in the next five years. The largest problem cited on the economic horizon involved the anticipated negative impact from tariffs. Concerns about the negative impact of tariffs on the domestic economy were spontaneously mentioned by nearly one-third of all consumers in the past three months, up from one-in-five in the prior four months.

US Consumer Sentiment Surges in September

University of Michigan | Joana Taborda |
9/14/2018 2:10:47 PM