consumer confidence improves in September, but uncertainty remains high

Consumer confidence in the United States recovered a little in September compared to August, but less than expected, due to uncertainty about the evolution of inflation and economic activity, according to the preliminary estimate released Friday by the University of Michigan.

The index climbed to 59.5 points, up 2.2% from August, but down 18.3% from September 2021. It disappointed analysts who had expected 60 points. “After the sharp improvement in confidence in August, consumers showed signs of uncertainty about the path of the economy“, detailed the director of the investigation Joanne Hsu, quoted in a press release. Because if consumers are more optimistic about the economic outlook over one year, they are on the other hand less so in the longer term.

Inflation remains a strong concern, but the future looks less bleak: “With energy prices continuing to fall, the median inflation rate expected for the coming year fell to 4.6%, its lowest level since last September.says Joanne Hsu. In the longer term, median inflation expectations fall to 2.8%, “below the 2.9-3.1% range for the first time since July 2021“, adds the economist, who however mentions “high (consumer) uncertainty about the future path of prices“.

Thereby, “uncertainty about short-term inflation has reached levels last seen in 1982, and uncertainty about long-term inflation has risen (…) this month, well above the levelof last September, she specifies. Inflation in the United States slowed slightly in August, to 8.3% over one year, against 8.5% in July. However, it remains very high, and a slowdown in consumption, and therefore in economic activity, is now necessary to bring it back into line, raising fears of a recession.


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