Consumer sentiment decreased 3.9 points month-over-month in September to 47.8, and is down 7.3 points from one year ago, according to preliminary results of the University of Michigan Surveys of Consumers. The Current Economic Conditions Index edged down 1 point from the previous month to 50.9 and down 9.5 points from the previous year. The Consumer Expectations decreased 5.7 points to 45.8, and 5.9 points lower than the September 2025 Index.
Consumer sentiment receded less than 4 index points for the second consecutive month of decreases. Democrats and Republicans alike posted sizable declines, while independents were little changed from August. Year-ahead expectations for both personal finances and business conditions plunged. With a resurgence in fuel prices and trade tensions, consumers anticipate greater pressures on their pocketbooks to come. Five-year expected business conditions remained stable at readings well below their historical average, suggesting that consumers believe that emerging risks this month may not have further worsened the long-run outlook. Overall, sentiment is now 16% below February, prior to the start of the Iran conflict, and 13% lower than a year ago.
Year-ahead inflation expectations jumped from 4.0% last month to 4.6% this month, the highest reading since June. The current reading substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 readings. Long-run inflation expectations ticked up to 3.4%, ending three consecutive months at 3.3%. These expectations remain higher than their 2024 range of 2.8% to 3.2%.
Read the University of Michigan Surveys of Consumers release.
