Consumer Sentiment Inched Up 2.2% in Early September

Ann Arbor, MI, September 16, 2022-Consumer sentiment rose 2.2% in early September to 59.5, according to the University of Michigan Survey of Consumers. 

This represents an 18.3% decline year over year. 

“Consumer sentiment was essentially unchanged in September, just 1.3 index points above August,” says Survey of Consumers director Joanne Hsu. “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. Personal finance components of the index as well as buying conditions for durables remained at similar, relatively low levels from last month. After the marked improvement in sentiment in August, consumers showed signs of uncertainty over the trajectory of the economy. 

“With continued declines in energy prices, the median expected year-ahead inflation rate declined to 4.6%, the lowest reading since last September. At 2.8%, median long run inflation expectations fell below the 2.9-3.1% range for the first time since July 2021. However, it is unclear if these improvements will persist, as consumers continued to exhibit substantial uncertainty over the future trajectory of prices (see chart). Uncertainty over short-run inflation reached levels last seen in 1982, and uncertainty over long run inflation rose from 3.9 to 4.5 this month, well above the 3.4 level seen last September.”