US consumer sentiment dropped to a four-month low in September, with households expressing increased concern about rising inflation eroding their purchasing power. The University of Michigan's Consumer Sentiment Index fell to 48.1, down from 51.7 in August, reflecting a broad weakening of economic outlooks across the political spectrum.
Declining consumer sentiment can signal reduced consumer spending, a key driver of economic growth, potentially impacting corporate earnings and overall economic activity.
US consumer sentiment declined to a four-month low in September, driven by concerns that rising inflation will diminish household purchasing power, according to a survey released on Friday. The University of Michigan's Surveys of Consumers reported that its final Consumer Sentiment Index reading for September was 48.1, a decrease from 51.7 in August. This figure was an improvement from the preliminary reading of 47.8 but fell short of the 47.6 forecast by Reuters-polled economists. The index has seen a 15% drop since January. Consumers' perceptions of both current and expected personal finances over the next year weakened by approximately 10%, with persistent worries about high prices contributing to the decline. Joanne Hsu, director of the Surveys of Consumers, noted broad agreement across the political spectrum that the economic outlook has worsened since the start of the year, with Republican sentiment down 20% and Democratic sentiment down 13% compared to January 2026. Expectations for inflation over the next year rose to 4.6% from 4.0% in August, and five-year inflation expectations increased slightly to 3.4% after remaining stable for three months.
Pick the topics you care about. Get only what matters, on your cadence.