U.S. consumer confidence has declined significantly this month, reaching its weakest point since May, according to early data from the University of Michigan’s Index of Consumer Sentiment. The preliminary reading for early September stands at 55.4, down nearly three points from the previous month. n nThe last time sentiment was this low was in April and May, following former President Donald Trump’s announcement of sweeping global tariffs. The current level reflects growing unease among Americans about the economic outlook. n nJoanne Hsu, director of the Surveys of Consumers, stated that this pessimism is especially pronounced among lower- and middle-income households. Consumers are expressing concerns about multiple economic vulnerabilities, including worsening business conditions, a weakening labor market, and persistent inflation. Personal financial expectations have also softened, with both current and anticipated finances declining by approximately 8% this month. n nThe survey highlights that many Americans expect unemployment to rise and perceive an increased risk of job loss for themselves over the next five years. These fears are grounded in recent labor market trends. Only 22,000 jobs were added in August, continuing a slowdown that began earlier in the year. July saw 79,000 new positions, while June recorded a net loss of 13,000 jobs. Additionally, the Bureau of Labor Statistics recently revised job growth estimates downward by 911,000 for the period from March 2024 to March 2025. At the same time, inflation has continued to climb. n nTrade policy remains a key concern. Hsu noted that 60% of survey participants spontaneously mentioned Trump’s trade war during interviews, a figure nearly unchanged from August. n nThis month’s sentiment marks a 21% decrease compared to September 2024. Last year, the index remained above 70 from September through January. It fell to 64.7 in February and has fluctuated between 61.7 and 52.2 since. n nMarket watchers anticipate that the Federal Reserve will lower interest rates in the coming week, which could provide some relief to consumers and potentially improve sentiment in the near term. n— news from Quartz
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Consumers’ economic outlook falls to lowest level since May
U.S. consumers are almost back to worrying about the economy like they did in May. n nConsumer sentiment has dropped nearly three index points so far this month, according to preliminary data from the University of Michigan’s Index of Consumer Sentiment published Friday. n nThe last time consumers’ outlook on the economy looked this weak was in the wake of President Donald Trump ‘s global tariffs announcement in April. n nIn April and May, consumer sentiment sank to 52.2. Early September data shows consumer sentiment at 55.4, its lowest rate since then, according to the survey. n nJoanne Hsu, Surveys of Consumers director, said in the release that this sentiment was “particularly strong” among lower- and middle-income consumers. n n“Consumers continue to note multiple vulnerabilities in the economy, with rising risks to business conditions, labor markets, and inflation,” Hsu said. “Likewise, consumers perceive risks to their pocketbooks as well; current and expected personal finances both eased about 8% this month.” n nThe survey noted that consumers continue to expect unemployment to increase with a “heightened risk” to their own jobs. Consumers ‘ concerns are fairly aligned with their expectations for rising unemployment and “heightened risks of personal job loss” during the next five years. n nThis fear isn’t coming out of nowhere. Only 22,000 jobs were added in August, marking a continuation of a cooling labor market. In July, 79,000 jobs were added while June saw a net loss of 13,000 jobs. Just this Tuesday, the Bureau of Labor Statistics revised the number of jobs added from March 2024 to March 2025 down by 911,00. And while the labor market took hit after hit, inflation continued to rise in August. n nTariffs also remain on consumers’ minds, with 60% of consumers “providing unprompted comments” about Trump’s trade war during interviews, Hsu noted, adding this is “little changed” from August. n nThis month’s early data represents a 21% drop from September 2024. n nFrom last September to this January, consumer sentiment sat at an index above 70. In February it dropped to 64.7 and has jumped between a high of 61.7 and a low of 52.2 since then. n nThe Federal Reserve is expected to cut interest rates next week, which could offer consumers some much needed relief and improve their feelings toward the economy.