U.S. Consumer Sentiment Hits Four-Month Low as Republican Sentiment Weakens
The economic outlook for the next year fell to its lowest level since 2022 as year-ahead inflation expectations rose to 4.6%.
U.S. consumer sentiment fell by less than four index points in September to its lowest level in four months, while rising inflation expectations and a weaker economic outlook added pressure to household confidence.
The outlook for the U.S. economy over the next year dropped to its weakest level since 2022. Sentiment weakened across age, education, geography, political affiliation and income groups since the start of the year.
Inflation expectations moved higher. Consumers’ year-ahead expectations rose to 4.6% from 4.0% in August, the highest reading since June. Long-run expectations increased to 3.4%, above the 2.8%-3.2% range recorded throughout 2024.
Political differences widened in the latest results. Republican sentiment is now 20% below its January level, while sentiment among Democrats has declined 13% over the same period.
“Despite political differences, consumers unanimously believe that the outlook for the economy has diminished,” Joanne Hsu, director of the survey, said.
Views of current and expected personal finances also deteriorated. Buying conditions for durable goods improved slightly, as some consumers said purchasing now could shield them from future price increases.
The figures add to recent evidence of persistent inflation concerns among U.S. consumers, with higher prices continuing to weigh on household expectations.
