Concerns over the economic outlook factored in a decline in consumer confidence in early September
Consumer confidence has declined from August levels, according to the preliminary results for September of the Surveys of Consumers by University of Michigan.
Preliminary results of the survey showed the index of consumer sentiment at 95.3, down 1.5% from 96.8 in August and up 4.5% from September 2016. The index of current economic conditions was 113.9, its highest level since November 2000. The preliminary figure increased 2.7% from 110.9 in the prior month and 9.3% from 104.2 in the year-ago period. The index of consumer expectations fell 4.9% to 83.4 from 87.7 in August, but increased 0.8% from 82.7 in September.
Richard Curtin, chief economist of the Surveys of Consumers, said the decline resulted from fears over the outlook for the national economy. Confidence edged downward despite an improvement in consumer assessments of current economic conditions, he said.
“The two hurricanes had a greater impact on expected economic conditions. Across all interviews in early September, 9% spontaneously mentioned concerns that Harvey, Irma, or both, would have a negative impact on the overall economy,” Curtin said. “Among those who mentioned the hurricanes, the sentiment index was 80.2, while among those who did not spontaneously mention either hurricane, the sentiment index remained unchanged from last month at 96.8. Given the widespread devastation in Texas and Florida, it is not surprising to find these very negative initial reactions, nor would it be surprising if these negative assessments last longer than following most past hurricanes.”
Additionally, Curtin said that although there are concerns among consumers of higher gas prices and a slight increase in the overall inflation rate, these were offset by the best consumer assessments of their financial situations in over a decade. The negative impacts of the hurricanes are also counterbalanced by higher incomes and increasing home and equity values, Curtin said.
