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The final University of Michigan Consumer Sentiment Index for September rose month over month from an August reading of 96.2 to 100.1. When the preliminary September index score was reported earlier this month, the index reflected a larger increase to 100.8.

The September index is 4.1% higher month over month and 5.3% higher compared with September 2017. Economists polled by Bloomberg were expecting a final September reading of 100.8.

The September index and subindex readings came in higher in every case when compared both to August and to September 2017. However, compared with the preliminary data for the month published on September 14, the readings are somewhat lower.

Month over month, the consumer expectations subindex rose 3.9% to 90.5 and the current conditions subindex rose from 110.3 to 115.2 (up 4.4%).

Year over year, the current conditions subindex is up 3.1% and the consumer expectations subindex is up 7.2%.

The preliminary September index of 100.8 dropped by 0.7 points, the current conditions preliminary score dropped 0.9 points and the expectations index score dropped 0.6 points from the September preliminary reading.

The survey’s chief economist, Richard Curtin, said:

Consumer sentiment remained at very favorable levels in September, with the Index topping 100.0 for only the third time since January 2004. Most of the September gain was among households with incomes in the bottom third, whose index value of 96.3 was the highest since November 2000. In contrast, the Sentiment Index among households with incomes in the top third lost a total of 8.1% during the past seven months since reaching its cyclical peak of 111.9 in February 2018. This divergence across income subgroups has been observed in past economic cycles and indicates that the expansion has now benefitted nearly all population subgroups. All households held very optimistic expectations for improved personal finances in the year ahead, the most favorable financial prospects since 2004. Despite a lessening in September of the expected size of gains in nominal incomes, inflation expectations also declined, acting to offset concerns about declining living standards. Consumers anticipated continued growth in the economy and expected the unemployment rate to continue to slowly decline during the year ahead. The single issue that was cited as having a potential negative impact on the economy was tariffs. Concerns about the negative impact of tariffs were cited by nearly one-third of all consumers in September. Those that voiced negative views of tariffs also held much less favorable prospects for the economy and held inflation expectations that were 0.6 of a percentage point higher than those who didn’t mention tariffs. The pace of growth in real personal consumption expenditures can be expected to average 2.6% during late 2018 and into the first half of 2019.

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