Consumer sentiment fell in September but remained 16 percent higher than a year ago, according to the University of Michigan Surveys of Consumers.
The index for consumer sentiment fell 2 percent to 68.1 but remained 16.2 percent above its year-ago mark. The index tracking current economic conditions fell 5.7 percent to 61.4 from 75.7 in August, which is still nearly 20 percent above its mark from September 2022. The index of consumer expectations increased less than one percent to 66, but is still 14 percent above its reading from a year ago.
Surveys of Consumers Director Joanne Hsu said the declines came as concerns continue over the potential government shutdown and labor disputes in the auto industry. Still, year-ahead inflation expectations fell to 2.8 percent, below the 2.9 percent to 3.1 percent range for only the second time in the last 26 months.
“A small decline in consumer expectations over their personal finances was offset by a modest improvement in expected business conditions,” Hsu said. “Customers are understandably unsure about the trajectory of the economy given multiple sources of uncertainty. Until more information emerges about these developments, though, consumers have reserved judgment on whether economic conditions have materially changed from the past few months.”
The Conference Board’s Consumer Confidence Index fell to 103 from 108.7 in August. The short-term outlook for income, business and labor market conditions fell to 73.7 from 83.3 in August, indicating that a recession is likely in the next 12 months. “Write-in responses showed that consumers continued to be preoccupied with rising prices in general, and for groceries and gasoline in particular,” said Chief Economist Dana Peterson. “Consumers also expressed concerns about the political situation and higher interest rates.”