Consumer sentiment declines in early September as inflation picks up

Consumer sentiment declines in early September as inflation picks up

Reuters - Unrealized consumer sentiment strengthened in early September after plunging the month before to its lowest level for nearly a decade. But consumers continue to have a bleak view of the outlook amid a stiff bout of inflation, a survey showed on Friday.

The University of Michigan said its consumer sentiment indexed to 71 in the first half of September from 70.3 in August - the lowest since December 2011 - by 71 in September. Economists polled by Reuters were forecasting a reading of 72.

Assessments of the current conditions slipped further, to 77.1 from 78.5 in August, while the survey's forward-looking expectations index ticked up to 67.1 from 65.1, which had been the lowest since 2013 on the whole globe.

The slow consumer sentiment dropoff of August in early September showed that consumers expected the least favorable economic prospects in more than a decade, report's director Richard Curtin said in a statement.

Consumers' views of inflation remain elevated, although they appear to have stopped charging higher over the summer when key official gauges of price increases reached their highest levels in years.

The survey's one-year inflation outlook ticked back to 4.7% this month to match July reading, which had been higher since 2008 from 4.6% in August. The five-year outlook held steady at 2.9% meanwhile.