US consumer sentiment highest since May

US consumer sentiment improved in September to its highest level since May, according to a preliminary survey released on Friday.

The University of Michigan’s consumer sentiment index came in at 69.0, up from 67.9 a month earlier and 67.8 in September 2023. Analysts were expecting a reading of 68.0.

The index for current economic conditions printed at 62.9 in September, up from 61.3 in August but down from 71.1 in the same month a year ago.

Finally, the index of consumer expectations was 73.0 this month, versus 72.1 in August and 65.7 in September last year.

Surveys of consumers director Joanne Hsu said: "Sentiment is now about 40% above its June 2022 low, though consumers remain guarded as the looming election continues to generate substantial uncertainty.

"A growing share of both Republicans and Democrats now anticipate a Harris win. Consistent with their divergent views of the implications of a Harris presidency for the economy, partisan gaps in sentiment inched up.

"Note that interviews for this release concluded prior to Tuesday’s debate; a more comprehensive look at election expectations will be released next week."

Thomas Ryan, North America economist at Capital Economics, said: "Despite the small rise in the University of Michigan consumer sentiment index in September, consumer confidence remains in a slump.

"At face value, weak sentiment points to softer consumer spending, but confidence has not been an accurate gauge of consumption growth for some time now, so we would take it with a pinch of salt."