Consumer Sentiment Hits Lowest Level Since May On Job Loss Concerns

U.S. consumer sentiment fell to the lowest level since May, while long-term inflation expectations rose for the second consecutive month.

According to a survey released by the University of Michigan, the preliminary September sentiment index declined to 55.4 from 58.2 in August, underscoring consumers' anxiety about employment prospects and the broader economy.

“Consumers continue to note multiple vulnerabilities in the economy, with rising risks to business conditions, labor markets, and inflation. Likewise, consumers perceive risks to their pocketbooks as well,” said Joanne Hsu, Surveys of Consumers Director.

“Consumers’ expected probability of personal job loss grew sharply this year and ticked up in September as well,” Hsu added, according to a Bloomberg report.

The survey noted that the year-ahead inflation expectations remained at 4.8%, while long-term inflation expectations rose for the second consecutive month to 3.9%. “Trade policy remains highly salient to consumers, with about 60% of consumers providing unprompted comments about tariffs during interviews,” Hsu added, according to the survey.

This comes at a time when weekly jobless claims rose to the highest level in four years, according to a Bureau of Labor Statistics report on Thursday. Jobless claims rose by 27,000 to 263,000 in the week ended September 6, higher than a Dow Jones estimate of 235,000.

Meanwhile, U.S. equities gained in Friday’s opening trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.1%, while the Invesco QQQ Trust (QQQ) rose 0.43%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘neutral’ territory.

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