The University of Michigan today (9-30-22) released its final Consumer Sentiment Index (CSI) for September. The Index of Consumer Sentiment increased to a reading of 58.6 in September, up from its reading of 58.2 in August. This is a month-over-month increase of 0.7% but down 19.5% year-over-year (72.8 in September 2021).
The Current Economic Conditions increased to a reading of 59.7 in September, up from its reading of 58.6 in August. This is a month-over-month increase of 1.9% but down 25.5% year-over-year (80.1 in September 2021).
Finally, the Index of Consumer Expectations was flat at 58.0 in September, unchanged from August. This is down 14.8% year-over-year (68.1 in September 2021).
In remarks and analysis prepared to accompany the release of the CSI, Joanne Hsu, Director of Surveys for the University of Michigan, said:
“Consumer sentiment confirmed the preliminary reading earlier this month and was essentially unchanged from the month prior, at less than one index point above August. Buying conditions for durables and the one-year economic outlook continued lifting from the extremely low readings earlier in the summer, but these gains were largely offset by modest declines in the long run outlook for business conditions. As seen in the chart, sentiment for consumers across the income distribution has declined in a remarkably close fashion for the last 6 months, reflecting shared concerns over the impact of inflation, even among higher-income consumers who have historically generated the lion’s share of spending.
The median expected year-ahead inflation rate declined to 4.7%, the lowest reading since last September. At 2.7%, median long run inflation expectations fell below the 2.9–3.1% range for the first time since July 2021. Inflation expectations are likely to remain relatively unstable in the months ahead, as consumer uncertainty over these expectations remained high and is unlikely to wane in the face of continued global pressures on inflation.”
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