U.S. consumer sentiment weakened in September as rising fuel prices and trade tensions pushed inflation expectations higher, the University of Michigan's Surveys of Consumers found. The headline index missed economists' forecast, while one-year inflation expectations climbed to their highest reading in months.
The University of Michigan's Consumer Sentiment Index dropped to 47.8 this month from 51.7 in August. Economists polled by Reuters had forecast the index at 51.0. Joanne Hsu, the survey's director, said consumers expect greater pressure on their finances: "With a resurgence in fuel prices and trade tensions".
Inflation expectations climb
Consumers' expectations for inflation over the next year jumped to 4.6% from 4.0% last month. Twelve-month inflation expectations stood at 3.4% in February, before the U.S.-led war with Iran started.
They edged up to 3.4% from 3.3% in August over a five-year horizon, above their 2024 range of 2.8% to 3.2%.
Sentiment split along party lines
Rising gasoline prices and trade tensions stoked fears of higher inflation over the next 12 months, the survey found.
Source: Investing.com
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