US consumer confidence fell to its lowest level in four months in September, short-term inflation expectations rose to 4.6%

The Zhitong Finance App learned that as rising energy prices further heightened the concerns of American households about the cost of living, American consumer confidence continued to deteriorate in September and fell to its lowest level in four months. At the same time, consumer expectations for medium- to long-term inflation in the coming year have both risen, and their views on economic prospects and personal financial conditions have clearly weakened. According to the final survey data released by the University of Michigan on Friday, the US consumer confidence index fell to 48.1 in September, a further decline from August, and hit a four-month low.

Inflation expectations, on the other hand, have increased markedly. American consumers expect prices to rise 4.6% in the next year, up from 4% in August; average annual inflation for the next 5 to 10 years is expected to rise to 3.4%, the highest level since May this year.

High energy prices are putting pressure on living costs

As consumer confidence deteriorated in September, US diesel prices rose to historic highs, and gasoline prices continued to rise. For ordinary households, rising fuel costs have further amplified long-standing dissatisfaction with the high cost of living. Meanwhile, overall US inflation remains stubborn. Prices are rising faster than wages, and mortgage interest rates have broken through 7%, rising to a high level in more than two years, further increasing the burden of buying homes for many households.

“Despite differences in political positions, consumers agree that the economic outlook has deteriorated,” said Joanne Hsu, head of consumer research at the University of Michigan. The survey shows that since this year, the confidence of various consumer groups in the US has declined regardless of age, level of education, region, political party, or income level.

Economic outlook forecast falls to lowest level since 2022

Consumer concerns about the future economic situation are particularly evident. The indicators for measuring the economic outlook for the coming year fell sharply in September to their lowest level since 2022; at the same time, consumers' expectations of their own future financial situation deteriorated further.

The consumer expectations index fell to a four-month low, and indicators reflecting the current state of the economy also declined, indicating that American consumers are not only more pessimistic about the future, but their evaluation of the current economic environment is also weakening.

This change is worth watching because consumer spending has always been an important force supporting US economic growth. If continued high prices, energy costs, and borrowing costs further erode household purchasing power, consumer spending intentions may be under greater pressure.

What is behind the slight improvement in willingness to buy durable goods is “afraid that they will be more expensive in the future”

It is worth noting that consumer evaluations of durable goods purchasing conditions improved slightly in September, but this change does not entirely mean that consumers are more optimistic about the economy. Hsu pointed out that some of the improvements actually stem from consumers believing that instead of waiting, they should complete large purchases now to avoid further price increases in the future.

In other words, consumers' willingness to buy durable goods such as cars and home appliances has improved. This may be due in part to concerns about inflation causing demand to be released earlier, and households are more confident about future income or economic prospects.

The latest survey covered consumer feedback from August 25 to September 21.