US consumer sentiment fell to 48.1 in September from 51.7 in August, a University of Michigan survey found, as grocery and gas prices weighed on views of the economy. Year-ahead inflation expectations rose to 4.6% from 4%, their highest reading since June.
Consumers’ expectations for their personal finances weakened by about 10%, and the reading was slightly above the 47.5 market expectation. Survey director Joanne Hsu said the short-term business outlook plunged amid renewed concern that elevated fuel prices and trade disputes could affect the economy as a whole. She said consumers’ economic outlook had weakened across the political spectrum since the start of the year.
Long-term inflation expectations rose to 3.4% from 3.3%, ending three months at 3.3% and remaining above the 2.8%–3.2% range seen in 2024. AAA says average gas prices have climbed more than $1.50 since the war with Iran began and are nearing $5 a gallon nationwide; California’s average is above $6. Treasury Secretary Scott Bessent said the US and China would extend their current trade truce, with talks set to continue in early 2027. After US-Canada talks collapsed in late August, President Trump imposed 50% tariffs on about $20 billion worth of Canadian goods.
