Topline
Americans’ concerns about the economy worsened this month as consumers expressed growing concerns about rising prices and a weakening labor market, according to the University of Michigan’s widely tracked survey released Friday.
Consumers have expressed growing frustrations about rising prices “eroding their personal finances.”
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Key Facts
Consumer sentiment—a measurement on Americans’ views on the economic outlook—declined to 55.1 in September from 58.2 in August, below the historical benchmark of 100 and the lowest level since May, a reading of the University of Michigan’s survey found.
The decline in sentiment fell below Wall Street’s consensus of 55.9, according to FactSet.
Americans anticipate inflation rising to 4.7% over the next year, below August’s projections of 4.8%, and for prices to increase 3.7% over the next five to 10 years, a 0.4% uptick from last month’s reading.
Why Are Americans Pessimistic About The Economy?
Joanne Hsu, the survey’s director, said in a statement that consumers “continue to express frustration over the persistence of high prices,” and 44% of respondents “spontaneously” cited higher prices as “eroding their personal finances,” the highest reading in a year. Americans have grown increasingly worried about the outlook for their incomes and personal finances, Hsu said, adding consumers “feel pressure both from the prospect of higher inflation as well as the risk of weaker labor markets.”
Key Background
Even as consumers are increasingly sour on the economy, spending accelerated in recent months despite inflation remaining above the Fed’s 2% goal. Consumer spending increased 0.5% month-over-month in July to the highest level in four months, before declining to growth of 0.4% in August, according to federal data released Friday. Fed Chair Jerome Powell suggested earlier this week the “near-term” risks of inflation have cooled, while concerns have grown about a declining job market. Unemployment ticked up to 4.3% in August after the U.S. added far fewer jobs than expected, and Wall Street expects the rate to remain the same in September, according to FactSet. Richmond Fed President Tom Barkin said Friday suggested consumers would continue spending as “unemployment is still low, nominal wages are still increasing and asset valuations are near all-time highs.”
Further Reading
Source: https://www.forbes.com/sites/tylerroush/2025/09/26/americans-more-pessimistic-about-us-economy-job-market-inflation-worries-deepen/
