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

Posted on September 29, 2023

The University of Michigan on Friday (9-29-23) released the final results of its Consumer Sentiment Index for September.

  • The Index of Consumer Sentiment declined to a reading of 68.1 in September, down from 69.5 in August. This is a month-over-month decline of 2.0% but up 16.2% year-over-year (58.6 in September 2022).
  • The Current Economic Conditions fell to a reading of 71.4 in September, down from 75.7 in August. This is a month-over-month decline of 5.7% but up 19.6% year-over-year (59.7 in September 2022).
  • The Index of Consumer Expectations increased to a reading of 66.0 in September, up from 66.5 in August. This is a month-over-month increase of 0.8% and up 13.8% year-over-year (58.0 in September 2022).

In remarks and analysis prepared to accompany the release of the report, Surveys of Consumers Director Joanne Hsu said:

Consumer sentiment confirmed its early-month reading and was little changed this month, slipping a mere 1.4 index points from August and remaining 16% higher than a year ago. A small decline in consumer expectations over their personal finances was offset by a modest improvement in expected business conditions. Consumers are understandably unsure about the trajectory of the economy given multiple sources of uncertainty, for example over the possible shutdown of the federal government and labor disputes in the auto industry. Until more information emerges about these developments, though, consumers have reserved judgement on whether economic conditions have materially changed from the past few months.

Year-ahead inflation expectations moderated from 3.5% last month to 3.2% this month. The current reading is the lowest since March 2021 and is above the 2.3–3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations came in at 2.8%, falling below the narrow 2.9–3.1% range for only the second time in the last 26 months. In comparison, long-run inflation expectations ranged between 2.2% and 2.6% in the two years pre-pandemic.

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