By Xavier Fontdegloria

 

Sentiment among U.S. consumers remained broadly unchanged in early September, staying at subdued levels after August's big drop triggered by the increase in Covid-19 cases due to the spread of the Delta variant.

The preliminary estimate of the index of consumer sentiment released Friday by the University of Michigan was 71.0 in September, slightly up from 70.3 in August and below the 72.0 consensus forecast from economists polled by The Wall Street Journal.

"The steep August falloff in consumer sentiment ended in early September, but the small gain still meant that consumers expected the least favorable economic prospects in more than a decade," said Richard Curtin, the survey's chief economist.

Consumer confidence hints Americans' willingness to spend on goods and services, which is a major driver of the U.S. economy.

Two components of the measure posted additional declines. Buying attitudes for household durables fell to a low reached only once before in 1980, and long-term economic prospects dropped to a decade low, Mr. Curtin said.

The decline in assessments of buying conditions for homes, vehicles, and household durables left all three near record lows, with consumers linking the declines to high prices, he said.

Americans' expected inflation rate increased in September compared with the previous month, the survey showed. For the next year, consumers expect prices to rise 4.7% compared with a 4.6% rise in August. For the next five years, inflation is expected to stand at 2.9%, unchanged from the prior month.

Consumers' assessment of the current economic conditions decreased to 77.1 in September from 78.5 in August. The index of consumer expectations--which reflects the balance of respondents anticipating improved business conditions in the next six months--rose to 67.1 from 65.1 the prior month.

The final reading for the month will be published Oct. 1.

 

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

 

(END) Dow Jones Newswires

September 17, 2021 10:27 ET (14:27 GMT)

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