Consumer sentiment falls to lowest level in nearly a year | Business News

Consumer sentiment falls to lowest level in nearly a year

26 Sep 2015 | Author: | No comments yet »

Final September Consumer Sentiment Index Rises to 87.2.

(ShareCast News) – US consumer confidence in September was higher than originally estimated but remained markedly below last month’s level, figures released on Friday showed.The University of Michigan index of consumer sentiment was revised up in the final September estimate, to 87.2 from the mid-month preliminary estimate of 85.7. It turns out that sentiment popped higher from the initial report, suggesting that the worries of August and the start of September were less present in the minds of consumers. While concerns about China and other soft spots in the global economy have rattled financial markets in recent weeks, the U.S. economy appears to be on fairly solid footing.

This morning’s survey details and commentary confirm that the September decline in sentiment was attributable to financial markets and concerns about international economic developments; negative economic news was reported by 68% of consumers (previous: 58%). Consumer spending is modestly advancing, propelled by lower gasoline prices and the first signs of stronger wage gains. “Consumers increasingly concluded that the stock market declines had more to do with international conditions than the domestic economy,” said Richard Curtin, chief economists at Michigan’s Survey of Consumers. Keep in mind that sentiment readings dipped across the three major index components from the readings in August, but all three were up from the September reading a year earlier. Current personal finances fell to 111 (previous: 120), while expected personal finances fell less, to 121 (previous: 124). “Interestingly, the decline in overall sentiment was led by consumers in the bottom two-thirds of the income distribution. Curtin said a significant development in recent consumer sentiment figures is “that consumers now believe that global economic trends can directly influence their own job and wage prospects as well as indirectly via financial markets.” The overall consumer sentiment reading touched a postrecession high in January but had softened somewhat since before a sharp drop-off in early September.

The drop poses modest downside risks for consumer spending; however, buying conditions for durables (151, previous: 152) in the consumer sentiment survey were little changed on the month. The actual spending data we have in hand through August suggest that spending remains solid, and we do not expect a sharp deterioration”, says Barclays © EconoTimes 2015.

That decline coincided with gyrations on Wall Street and a slowdown in hiring. “Despite this month’s decline, sentiment has been slowly climbing for the past 5 years,” economists from Contingent Macro Advisors wrote in a note to clients. “We should note that this survey took place during the recent stock price volatility of a magnitude that historically impacts sentiment.” The Michigan survey showed no change in consumers’ views on inflation. Republication or redistribution of content provided by EconoTimes is expressly prohibited without the prior written consent of EconoTimes, except for personal and non-commercial use. Neither EconoTimes nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.

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