The University of Michigan’s preliminary Survey of Consumers Index showed that overall consumer sentiment dropped to 55.4 in September, a 4.8 percent decline from August’s index of 58.2 and the lowest reading since May. The decline was sharper than expected. Economists polled by the Wall Street Journal had expected sentiment would slip to 58.1.
The Index is down by 21 percent from a year ago.
According to the survey, the barometer of Current Economic Conditions was 61.2 in September, a 0.8 percent decline from 63.3 in August and a 3.3 percent decrease from 63.3 a year ago. The Index of Consumer Expectations fell to 51.8, down 7.4 percent from 55.9 the prior month and losing 30.4 percent from 74.4 a year ago.
Surveys of Consumers Director Joanne Hsu said, “Consumer sentiment moved down less than three index points in early September. This month’s easing in economic views was particularly strong among lower and middle-income consumers. Buying conditions for durables improved, while all other index components fell. Consumers continue to note multiple vulnerabilities in the economy, with rising risks to business conditions, labor markets, and inflation. Likewise, consumers perceive risks to their pocketbooks as well; current and expected personal finances both eased about 8 percent this month. Trade policy remains highly salient to consumers, with about 60 percent of consumers providing unprompted comments about tariffs during interviews, little changed from last month. Still, sentiment remains above April and May 2025 readings, immediately after the initial announcement of reciprocal tariffs.
Hsu continued, “Year-ahead inflation expectations held steady at 4.8 percent, unchanged from August. Long-run inflation expectations moved up for the second straight month to 3.9 percent in September. This current reading is considerably lower than the 4.4 percent seen in April.”
