Consumer Sentiment Climbs for First Time in Four Months
Consumer confidence rose in September for the first time in four months as Americans grew more upbeat about the prospects for incomes and persistent low inflation.
The University of Michigan said Sept. 30 that its final index of sentiment rose to 91.2 from 89.8 in August. The median projection in a Bloomberg News survey called for 90, little changed from the 89.8 preliminary September reading.
Relatively subdued gasoline and grocery costs and moderate wage increases are keeping Americans optimistic that their incomes will stretch further. At the same time, consumers’ assessments of current economic conditions were the weakest in almost a year, which may keep spending moderate after an August slowdown.
“Low inflation continues to be a source of strength that has offset meager, although improved, income increases and boosted real income expectations,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement. “The slightly improved outlook for the economy came despite unchanged jobs prospects and the expectation of rising interest rates.”
Estimates in the Bloomberg survey of economists for the Michigan index ranged from 88.5 to 92. The Sept. 30 figure compares with an average consumer sentiment reading of 92.9 in 2015 and 91.5 in the first eight months of this year.
The gauge of expectations six months from now increased to 82.7, the highest since May, from 78.7 in August.
Survey respondents said this month they anticipated income gains of 1.7 % in the year ahead, the biggest since February, after 1.2 % in August.
The current conditions index, which measures Americans’ perceptions of their personal finances, declined this month to 104.2, the lowest since October, from 107.
Respondents expected the inflation rate in the next year will be 2.4 % compared with 2.5 % in the August survey. Over the next five to 10 years, they project a 2.6 % rate of price growth, after 2.5 % in the prior month that matched the lowest on record.
