The University of Michigan released its updated consumer sentiment report for the month of September. It turns out that sentiment popped higher from the initial report, suggesting that the worries of August and the start of September were less present in the minds of consumers.
September’s revision went up to 87.2 from a preliminary report of 85.7. This was good news, but the economist consensus reading posted by Bloomberg was 87.1 for the revision. Revisions generally have to be rather far off of the consensus for them to make any serious splash in financial markets.
Keep in mind that sentiment readings dipped across the three major index components from the readings in August, but all three were up from the September reading a year earlier.
The formal consumer sentiment reading was 87.2, versus 91.9 in August, but up from 84.6 a year earlier. The Current Economic Conditions Index of 101.2 was down from the 105.1 reading in August but up from 98.9 a year earlier. Lastly, the Index of Consumer Expectations was down to 78.2 from 83.4 in August, but up from 75.4 a year earlier.
Friday’s Surveys of Consumers report said:
The decline in optimism continued to narrow in late September as consumers increasingly concluded that the stock market declines had more to do with international conditions than the domestic economy. While the September Sentiment Index was at the lowest level in eleven months, it was still higher than in any prior month since May 2007. To be sure, a raft of recent events have been viewed as negative economic indicators by consumers, including falling commodity prices, weakened Chinese and other economies as well as continued stresses on European countries. Although most believe the domestic economy is still largely insulated, they have lowered the pace of job and wage growth that they now anticipate. The true significance of these findings is not the diminished economic prospects, but that consumers now believe that global economic trends can directly influence their own job and wage prospects as well as indirectly via financial markets. While now small, the influence of the global economy is certain to rise in the future and prompt widespread adjustments by consumers and policy makers.
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