University of Michigan Releases Final Results of Its Consumer Sentiment Index for September

On Friday, the University of Michigan released the final results of its Surveys of Consumers for September.

• The Index of Consumer Sentiment fell to a reading of 55.1 in September, down 5.3% from 58.2 in August. Year-over-year, the index was down 21.6% from 70.3 in September 2024.
• Current Economic Conditions fell to a reading of 60.4 in September, down 2.1% from 61.7 in August and down 5.3% from 63.8 in September 2024.
• The Index of Consumer Expectations fell to 51.7 in September, down 7.5% from 55.9 in August and down 30.6% from 74.5 in September 2024.

In remarks accompanying the release, Surveys of Consumers Director Joanne Hsu said:

“Consumer sentiment confirmed its early-month reading and eased about 5% from last month but remains above the low readings seen in April and May of this year. Although September’s decline was relatively modest, it was still seen across a broad swath of the population, across groups by age, income, and education, and all five index components. A key exception: sentiment for consumers with larger stock holdings held steady in September, while for those with smaller or no holdings, sentiment decreased. This month, sentiment moved down about 9% for independents and 4% for Republicans, whereas it lifted this month for Democrats. Nationally, not only did macroeconomic expectations fall, particularly for labor markets and business conditions, but personal expectations did as well, with a softening outlook for their own incomes and personal finances. Consumers continue to express frustration over the persistence of high prices, with 44% spontaneously mentioning that high prices are eroding their personal finances, the highest reading in a year. Interviews this month highlight the fact that consumers feel pressure both from the prospect of higher inflation as well as the risk of weaker labor markets.

Year-ahead inflation expectations receded slightly to 4.7% from 4.8% last month. Long-run inflation expectations rose for the second straight month to 3.7% in September but remain well below the 4.4% spike in April.”