US Consumer Sentiment Hits Five-Month High Amid Economic Optimism

Friday, 27 September 2024, 11:34

US consumer sentiment has risen to a five-month high, buoyed by optimism for the US economy following the Federal Reserve's recent interest-rate cut. The University of Michigan's final September sentiment index increased to 70.1 from 69 earlier this month. This uptick reflects improved consumer outlooks and stronger expectations about the US job market.
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US Consumer Sentiment Hits Five-Month High Amid Economic Optimism

US Consumer Sentiment Surges in September

US consumer sentiment continued to rise in late September, reaching a five-month high driven by optimism regarding the US economy following the Federal Reserve's interest-rate cut. The University of Michigan's final September sentiment index saw an increase to 70.1 from the 69 preliminary reading earlier this month. This latest figure follows an August index of 67.9.

Consumers anticipate prices will rise at an annual rate of 2.7% over the next year, marking the lowest expectation since the end of 2020, down from 2.8% the previous month. Over the next five to 10 years, inflation is expected to climb by 3.1%.

Fed's Interest Rate Decision Influences Outlook

The sentiment increase follows the Federal Reserve's decision on September 18 to lower interest rates by half a percentage point. This maneuver is part of a strategy to prevent deterioration in the job market.

Recent government figures indicate a modest rise in August household spending. Although earlier concerns were raised about the US labor market, consumer perspectives on unemployment have improved in recent weeks, reflecting a more favorable outlook.

  • 55% of respondents expect borrowing costs to decline in the coming year, the highest share on record.
  • Improved views on purchasing conditions for significant purchases and homes have emerged, marking the most positive sentiment since April.

“Sentiment appears to be building momentum as consumers’ expectations for the economy brighten,” said Joanne Hsu, director of the survey. She noted that many consumers' outlooks remain influenced by upcoming election results.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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