In September 2025, U.S. consumer sentiment dropped to 55.4 from 58.2 in August, marking its weakest reading in four months and reflecting growing unease about the economy. The decline was broad-based, affecting nearly all income and demographic groups, though households with higher wealth tied to stock market gains reported slightly steadier views. The University of Michigan survey showed that while near-term inflation expectations eased modestly, long-term inflation expectations inched up, highlighting persistent anxiety over rising costs. Consumers also expressed more concern about weakening job prospects and the impact of tariffs, which added to inflation worries. Despite the gloomier outlook, recent data showed consumer spending rose 0.6% in August, underscoring the tension between Americans’ actual spending behavior and their more negative feelings about the economy’s direction. Overall, the sharp downturn in sentiment signals rising fragility in confidence as inflation, labor uncertainty, and trade policy weigh on the public’s outlook.
https://www.cnn.com/2025/09/26/economy/us-consumer-sentiment-september#openweb-convo
It’s interesting even though confidence is low, spending is still strong. o see that even though consumer confidence is near record lows, spending remains relatively strong. Many may feel uncertain but continue spending out of necessity or habit. If conditions worsen, spending may be reduced.
ReplyDeleteYeah, I agree with Lane that it's really interesting that despite what you might assume with consumers' negative sentiments about the economy, consumption is still really strong. I think this is because, like Lane said, people have to spend on necessities, but I also think that it's possible that higher income households can maybe afford to spend more because they have more of a cushion, and that might be responsible for the increase in consumer spending that we're seeing.
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