Consumer Confidence Drops
U.S. and German Consumer Sentiment Plummets Amid Rising Energy Costs and Inflation
Anonymous
U.S. consumer sentiment fell to 48.1 in September, its lowest level in four months and the second-lowest in the University of Michigan survey’s 74-year history, as high prices and economic uncertainty weighed on households. Assessments of current and future finances weakened, and expected inflation over the next year rose to 4.6%; sharply higher energy costs linked to the Iran conflict, fuel-price concerns and trade disputes also darkened the business outlook. German consumer sentiment fell more sharply than expected heading into October, to -30.6 from a revised -26.8 in September, its lowest level since May. Rising energy costs weighed on German households’ income expectations and purchasing power, while willingness to save reached its highest level since the 2008 financial crisis and willingness to buy edged lower. German economic expectations rose for a fifth consecutive month, offering a modest counterpoint.
Key Points
1
Despite worsening sentiment overall, U.S. buying conditions for durable goods improved slightly: some consumers said buying now could help them avoid higher prices later.
2
The University of Michigan’s survey director said sentiment had declined since January across the political spectrum, but the drop was larger among Republicans (20%) than Democrats (13%).
3
In Germany, income expectations fell to their lowest level since April. The survey also found that households with greater financial resources were especially likely to save, in part to offset the inflation-related loss of purchasing power of their savings.
4
The German consumer-climate results were based on interviews with 2,000 consumers conducted from September 3 to 14 on behalf of the European Commission.
Sentiment
Mostly NegativeNEGATIVENEUTRALPOSITIVE
Publishers
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Articles
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Reach
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