Consumer sentiment up, expectations at 31-year low
Consumer sentiment inched up in early September, but Americans remained gloomy about the future with a gauge of expectations falling to the lowest level since 1980, a survey released on Friday showed.
The Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment edged up to 57.8 from 55.7 the month before, which had been the lowest level since November 2008. It topped the median forecast of 56.5 among economists polled by Reuters.
Overall, the data indicate that a renewed downturn in consumer spending is as likely as not in the year ahead, survey director Richard Curtin said in a statement.
Even without a downturn, consumer spending will not be strong enough to enable the rapid job growth that is needed to offset reduced long-term expectations.
The gauge of consumer expectations dipped to 47.0 from 47.4. It was the lowest level since May 1980. The economic outlook for the next 12 months fell to 38 from 40, the lowest since February 2009 when the world economy was gripped by the credit crisis.
Consumers have become increasingly pessimistic about the strength of the recovery this year amid worries the U.S. economy could fall back into recession. A recent Reuters poll of economists put the odds at one in three.
Confidence in economic policies remained near historic lows after being damaged by political wrangling over raising the debt ceiling. Three out of four consumers expected bad times for the economy in the year ahead. Only half of respondents said the same at the beginning of the year.
The survey's barometer of current economic conditions gained to 74.5 from 68.7, and better than a forecast of 68.0.
The survey's one-year inflation expectation rose to 3.7 percent from 3.5 percent, while the survey's five-to-10-year inflation outlook was at 3.0 percent from 2.9 percent.
(Reporting by Leah Schnurr; Editing by Chizu Nomiyama)
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