U.S. consumer sentiment weakened in September as households became more concerned about inflation and the economic outlook, according to the final University of Michigan survey released Friday.
The university’s Index of Consumer Sentiment came in at 48.1, down from 51.7 in August and 55.1 a year earlier. The final result was slightly above the preliminary 47.8 reading and above the 47.6 consensus estimate cited by market reports.
The Current Economic Conditions index slipped to 50.9 from 51.9 in August, while the Index of Consumer Expectations fell more sharply to 46.3 from 51.5. The University of Michigan said overall sentiment reached its lowest level in four months.
Inflation expectations also moved higher. Year-ahead expectations rose to 4.6% from 4.0% in August, while five-year expectations increased to 3.4% from 3.3%. Those readings matter because the Federal Reserve closely watches whether elevated inflation becomes embedded in household expectations.
ForexLive also highlighted the 48.1 final sentiment reading and the rise in inflation expectations. For currency markets, the mix of weak confidence and firmer inflation expectations complicates the policy outlook: softer sentiment can point to slower demand, while higher expected inflation can keep pressure on the Fed to maintain a restrictive stance. EUR/USD and other dollar pairs remain sensitive to how policymakers balance those signals.