U.S. consumer sentiment improved in late September but worries persisted about jobs and finances which could curb household spending in the coming months, a survey released Friday showed.
The Thomson Reuters/University of Michigan’s final September reading of the overall index on consumer sentiment stood at 59.4, up from 57.8 earlier this month. Economists had expected no change from the initial September reading.
The index finished at 55.7 in August.
“The data indicate that consumers have shifted from anticipating deeper declines to the growing belief that the economy will stagnate at its currently depressed level,” survey director Richard Curtin said in a statement.
“Even without a downturn, spending will not be strong enough to enable the rapid job growth that is needed to offset the growing negative grip of economic stagnation,” he said.
With historically high unemployment, hopes of aid from Washington including a job creation bill from President Barack Obama might have caused a rebound in consumer sentiment.
“President Obama’s new jobs bill may be responsible for the September bounce in consumer sentiment,” Mr. Curtin said.
September’s pickup in sentiment was strongest among lower income families making $75,000 (U.S.) a year, rising 5.1 points. This category also showed a big boost in confidence in government economic policies in September, posting a net gain of 14 points.
On the other hand, sentiment among higher-income households whose annual income is over $75,000 rose only 2 points, while their confidence in government policies fell 6 points.
The survey’s barometer of current economic conditions rose to 74.9 from 74.5 in early September and 68.7 in August. Analysts had expected no change from the early September figure.
The survey’s gauge of consumer expectations edged up to 49.4 from 47.0 in early September and 47.4 in August. Analysts had expected no change from the earlier reading.
The survey’s one-year inflation expectation fell to 3.3 percent from 3.7 percent earlier this month and 3.5 percent in August, while the survey’s five-to-10-year inflation outlook dipped to 2.9 percent from 3.0 percent in early September and was unchanged from 2.9 percent in August.
The combination of a weak economic outlook and muted inflation expectations “meant that the majority of households in September anticipated declines in their inflation adjusted incomes during the year ahead,” Mr. Curtin said.