U.S. consumer sentiment improved slightly in the final September reading but remained near historically weak levels, as concerns about personal finances, high prices and the economic outlook continued to weigh on households.
The University of Michigan’s Consumer Sentiment Index was revised up to 48.1 in September from a preliminary reading of 47.8. Despite the modest revision, sentiment remained substantially below August’s 51.7 reading.
Personal Finances Remain Under Pressure
Consumers reported deteriorating views of both their current and expected personal finances, with concerns about elevated prices continuing to affect household perceptions.
Buying conditions for durable goods improved modestly, partly because some consumers viewed purchasing now as a way to avoid potentially higher prices later.
The outlook for business conditions over the coming year, however, weakened as households remained concerned about fuel costs and trade disputes and their potential effects on the broader economy. The preliminary survey had already shown a particularly sharp decline in consumer expectations.
Inflation Expectations Climb
Inflation expectations remained an important source of concern. Consumers expect prices to rise 4.6% over the next year, up from 4.0% in August and the highest reading since June.
Longer-term inflation expectations also increased, with the five-year measure rising to 3.4% from 3.3%, ending three consecutive months at that level.
The readings suggest that even as the headline sentiment index received a small upward revision, households remain cautious about purchasing power and the near-term economic environment.
