US consumer sentiment deteriorates in September, inflation expectations rise

In early September, U.S. consumer sentiment took a downturn as soaring gasoline prices and trade tensions sparked concerns about a rise in inflation over the next 12 months, according to a survey released on Friday. The University of Michigan's Surveys of Consumers reported that the Consumer Sentiment Index fell to 47.8 from 51.7 in August, falling short of economists' prediction of 51.0.

The index saw a decline among both Democrats and Republicans, while it remained relatively stable among Independents. Joanne Hsu, the director of the Surveys of Consumers, noted that the survey's measure of consumer expectations for inflation over the next year surged to 4.6% from 4.0% in the previous month. Before the onset of the U.S.-led war with Iran, the twelve-month inflation expectations stood at 3.4% in February.

Consumers' projections for inflation over the next five years also increased by 3.4% to 3.4% from 3.3% in August, surpassing the typical range of 2.8% to 3.2% for the year 2024.