U.S. Consumer Confidence Falls to Four-Month Low in September; Short-Term Inflation Expectations Rise to 4.6%

As rising energy prices further intensified American households' concerns about the cost of living, U.S. consumer confidence continued to deteriorate in September, falling to its lowest level in four months. At the same time, consumers' expectations for inflation over the next year and over the medium to long term both rose, while views on the economic outlook and personal finances also weakened markedly. Final survey data released by the University of Michigan on Friday showed that the U.S. consumer sentiment index fell to 48.1 in September, declining further from August and hitting a four-month low. Inflation expectations clearly heated up. U.S. consumers expect prices to rise 4.6% over the next year, up from 4% in August; the average annual inflation expectation for the next five to 10 years rose to 3.4%, the highest level since May this year. High energy prices add to cost-of-living pressures As consumer confidence deteriorated in September, U.S. diesel prices rose to a record high, and gasoline prices also continued to climb. For ordinary households, higher refueling costs further amplified long-standing dissatisfaction with the persistently high cost of living. At the same time, overall U.S. inflation remains stubborn. Prices are rising faster than wages, while mortgage rates have broken above 7%, rising to their highest level in more than two years, further increasing the homebuying burden for many families. Joanne Hsu, director of the University of Michigan's consumer survey, said: "Despite differences in political affiliation, consumers agree that the economic outlook has worsened." The survey showed that since the start of this year, confidence has declined among all types of U.S. consumer groups, whether divided by age, education level, region, political party, or income level. Economic outlook expectations fall to lowest since 2022 Consumers' concerns about the future economic situation were especially pronounced. In September, the indicator measuring the economic outlook for the next year fell sharply, dropping to its lowest level since 2022; at the same time, consumers' expectations for their own future financial situation also worsened further. The consumer expectations index fell to a four-month low, and the indicator reflecting current economic conditions also declined, showing that U.S. consumers are not only more pessimistic about the future, but also increasingly downbeat in their assessment of the current economic environment. This shift is noteworthy because consumer spending has been an important force supporting U.S. economic growth. If persistently high prices, energy costs, and borrowing costs further erode household purchasing power, consumers' willingness to spend could come under greater pressure. Durable goods buying conditions improve slightly, but behind it is fear that prices will be even higher later It is worth noting that in September, consumers' assessment of buying conditions for durable goods improved slightly, but this change does not entirely mean consumers are more optimistic about the economy. Hsu pointed out that part of the improvement actually stems from consumers believing that, rather than waiting, it is better to complete major purchases now to avoid further price increases in the future. In other words, consumers' improved willingness to buy durable goods such as cars and home appliances may partly reflect demand being pulled forward by inflation concerns, rather than households having greater confidence in future income or the economic outlook. The latest survey covered consumer feedback from August 25 to September 21.