U.S. consumer sentiment dipped in September as Americans expressed concern about the economic and inflationary impact of Hurricanes Harvey and Irma, University of Michigan survey data showed Friday.
Highlights of Michigan Sentiment (September)
Preliminary sentiment index fell to 95.3 (est. 95) from 96.8 in August Current conditions gauge, which measures Americans’ perceptions of their personal finances, increased to 113.9 from 110.9 Expectations measure decreased to 83.4 from 87.7
Key Takeaways
The figures are the first to broadly capture the effects of Harvey and Irma, which caused more than $100 billion in damage and sparked a jump in claims for unemployment benefits. According to the survey, 9 percent of respondents spontaneously said the storms would hurt the economy. The sentiment index was unchanged among consumers who didn't mention the storms.
Consumers expected slight increases in gasoline prices and inflation, as Harvey temporarily shuttered refineries in Texas. Policy makers don't expect the disasters to have a long-term effect on the economy, as reconstruction later in the year should offset their negative impact on third-quarter growth. A little over half of consumers reported improved finances for the fourth straight month, the highest percentage since November 2000.
Meanwhile, President Donald Trump is stepping up efforts to promote tax cuts that he says will benefit the middle class and boost an already-tight labor market. Most consumers said the economy had improved of late, with just one in five expecting conditions to deteriorate in the coming year. Only 25 percent of respondents expected an increase in unemployment, which is hovering near a 16-year low.
Official's View
“Given the current resilience of consumers, recent events are unlikely to derail confidence,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement. “Nonetheless, the disruptions will cause a brief period of weakness in economic growth and employment, accompanied by increased precautionary motives that will temper spending trends.”
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