Consumer Sentiment Rises In US As Buying Conditions Improve

A new survey shows consumers are becoming more bullish on the economy and their finances.

The University of Michigan Consumer Study released Friday morning showed Consumer Sentiment rose to 69 in September from 67.9 in August. It is also up from 67.8 in September 2023. It is now at its highest reading since May and increased for the second consecutive month.

The gain was led by an improvement in buying conditions for durables, driven by more favorable prices as perceived by consumers. Year-ahead expectations for personal finances and the economy both improved as well, despite a modest weakening in views of labor markets.

Sentiment is now about 40% above its June 2022 low.

Researchers say consumers remain guarded as the looming election continues to generate substantial uncertainty. A growing share of both Republicans and Democrats now anticipate a Harris win.

Partisan gaps in sentiment inched up but the study's authors noted that interviews were conducted before Tuesday's debate.

The gauge of current economic conditions rose to 62.9 from 61.4 although it is down from 71.1 a year ago.

The Index of Consumer Expectations number has jumped 11.1% from a year ago and sits at 73 in the preliminary September report.

Year-ahead inflation expectations fell for the fourth straight month, coming in at 2.7%. The current reading is the lowest since December 2020 and is well within the 2.3-3% range seen in the two years prior to the pandemic.

Long-run inflation expectations were little changed, edging up from 3.0% last month to 3.1% this month. Long-run inflation expectations remain modestly elevated relative to the range of readings seen in the two years pre-pandemic.