The University of Michigan Consumer Sentiment Index rose slightly from a final August reading of 74.1 to September’s preliminary level of 78.9. Economists polled by Bloomberg were expecting a preliminary September reading of 75.0. The final index reading in September of last year was 93.2.
Month over month, consumer sentiment rose by 4.8 index points. The month-over-month percentage increase in the score was 6.5%, and the year-over-year decline was 15.3%.
The consumer expectations subindex increased by 4.6 points in the past month, from 68.5 to 73.3 (up 7.0%), while the current conditions subindex rose from 82.9 to 87.5 (up 5.5%).
Year over year, the current conditions subindex fell by 19.4% and the consumer expectations subindex dropped by 12.1%.
The survey’s chief economist, Richard Curtin, noted that the index has returned to the top of the range it has moved in since April and that “the election has begun to have an impact on expectations about future economic prospects.” When asked who they thought would win (not who they favored), consumers were evenly split.
Curtin also noted that September’s higher index reading came in the outlook subindex and that “it was Democrats that posted gains in economic prospects while optimism about the economy weakened among Republicans.”
Consumers chose Trump over Biden as “more likely to benefit the economy and their finances, although most consumers said there was no difference with regard to their own finances.”
Two factors that could cause “volatile shifts and steep losses in consumer confidence” over the next few months are the outcome of the November election and delays in obtaining a COVID-19 vaccine. The end of the recession depends on these two factors, according to Curtin, and renewed federal relief benefits are needed to provide consumers with relief from the pain of the recession.