U.S. consumer sentiment falls to 47.8 in September

U.S. consumer sentiment fell significantly in September, dropping to 47.8 according to preliminary results from the University of Michigan Surveys of Consumers. This decline was sharper than economists had anticipated, as the index fell from 51.7 in August.

Key drivers for the downturn include rising fuel prices and heightened trade tensions. Consumers reported a plunge in year-ahead expectations for both personal finances and business conditions. Additionally, year-ahead inflation expectations rose to 4.6%, up from 4.0% in the previous month, marking the highest level since June.

Long-run inflation expectations also saw a slight increase to 3.4%. The report notes that the current sentiment level is 16% lower than it was in February, prior to the onset of the Iran conflict.