US consumer sentiment remains steady in September

Consumer sentiment in the US was steady in September, according to preliminary figures released on Friday.

The University of Michigan’s preliminary reading of the consumer sentiment index was unchanged in September from the previous month at 89.8, but up from 87.2 in the same month last year. The index came in below economists’ expectations for a reading of 90.8.

Meanwhile, the current economic conditions index declined to 103.5 from 107.0 in August but was up from 101.2 in September 2015.

Finally, the index of consumer expectations edged up to 81.1 from 78.7 last month and 78.2 last year.

Surveys of Consumers chief economist Richard Curtin said: “Confidence was unchanged in early September from the August final and barely different from the July reading. Small and offsetting changes have taken place in the third quarter 2016 surveys: modest gains in the outlook for the national economy have been offset by small declines in income prospects as well as buying plans.

“While income gains expected during the year ahead have edged upward, declines in inflation expectations were the main reasons future financial prospects improved, as both near and long term inflation expectations fell to near record lows. Nonetheless, buying plans suffered from the perception that no additional price discounts would be offered. Even the more optimistic outlook for the economy had little if any impact on the expected growth rate in new jobs. Importantly, all of these changes were relatively minor. Overall, consumers remain reasonably optimistic about their economic prospects.”

Pantheon Macroeconomics said: "A modest 2.4-point increase in the expectations index, to a three-month high, was exactly offset by a dip in the current conditions index. The latter usually tracks jobless claims, which are at their lowest level in the cycle, but the deviation between the numbers is with the normal range.

"We expect a rebound over the next few months. The expectations component is consistent with real consumption rising by about 3% y/y, which is the best we can expect in the medium-term, given the rate of growth of real after-tax incomes. In short, the sentiment numbers are not exciting, but they are good enough."