US Consumer Sentiment Beats Forecasts

The University of Michigan's consumer sentiment for the US rose to 92 in September 2019 from 89.8 in the previous month and above market consensus of 90.9, a preliminary estimate showed.

The consumer expectations sub-index increased to 82.4 in September from the previous month's 79.9; and the gauge for current economic conditions rose to 106.9 from 105.3.

Inflation expectations for the year ahead picked up to a four-month high of 2.8 percent in September from 2.7 percent in August; while the 5-year outlook declined to 2.3 percent from 2.6 percent.

"Consumer sentiment posted a small rebound from the sharp August decline, marking the third lowest level since Trump's election. While the uptick was across both current and expected economic conditions, the early September rebound was not widespread across age or income subgroups as it only fell among consumers under age 45 and among households with incomes in the top third---these two groups account for about half of all spending. The data do indicate that consumers anticipate that the Fed will cut interest rates next week, with net declines in interest rates more frequently expected at present than anytime since the depths of the Great Recession in February 2009 (see the chart). These expectations are likely to diminish the impact on spending from a quarter-point rate cut, but if rates remain unchanged, it may increase negative reactions by consumers. Concerns about the impact of tariffs on the domestic economy also rose in early September, with 38% of all consumers making spontaneous references to the negative impact of tariffs, the highest percentage since March 2018. Those who negatively mentioned tariffs also held more negative views on the overall outlook for the economy as well as anticipated higher inflation and unemployment in the year ahead. While a recession is not anticipated in the year ahead, neither is a resurgence in personal consumption. The outlook for consumption is for a slower but positive growth, keeping the expansion going for another year.", Surveys of Consumers chief economist, Richard Curtin, said.

US Consumer Sentiment Beats Forecasts

University of Michigan | Joana Ferreira |
9/13/2019 2:05:04 PM