Consumer sentiment falls amid rising economic concerns

Consumer sentiment slipped this month as outlooks worsened for lower- and middle-income households, according to the University of Michigan Surveys of Consumers..The index of consumer sentiment fell nearly 5 percent to 55.4 from 58.2 in August, and was down 21 percent from 70.1 a year ago. The sentiment index remains higher than in the spring when President Donald Trump announced reciprocal tariffs, said Surveys Director Joanne Hsu. Buying conditions improved for durable goods, while the other parts of the index weakened. The index tracking current economic conditions fell less than 1 percent to 61.2 from 61.7 in August, 3.3 percent lower than 12 months ago. The consumer expectations index fell 7.3 percent to 51.8 from 55.9 last month, 30.4 percent below its September 2024 mark of 74.4. Year-ahead inflation expectations remained at 4.8 percent, while long-term inflation expectations increased for the second straight month to 3.9 percent, which was still lower than its reading of 4.4 percent in April. “Respondents cited ongoing risks to business conditions, labor markets and inflation, with concerns also extending to personal finances,” Hsu said. The labor market is showing signs of weakness. Released Sept. 5, the latest unemployment rate was 4.3 percent, its highest mark since 2021. A small jobs increase of 22,000 was reported in total nonfarm employment. The drop in confidence was also captured in The Conference Board Consumer Confidence Index, which fell 1.3 points last month to 97.4, according to an Aug. 26 report. The index based on consumers’ assessments of current business and labor market conditions fell 1.2 points to 74.8, which is under the recession-indicating score of 80.