U.S. consumers’ attitudes about the economy and their personal finances continued declining in September “across groups by age, income, and education, and all five index components,” according to survey data released Friday by the University of Michigan.
The university’s index of consumer sentiment, which measures attitudes about the economy, dipped 5.3% from July to August after falling 5% from June to July. At 55.1 this month, the index was 21.6% below September 2024’s reading of 70.3.
“Consumers continue to express frustration over the persistence of high prices, with 44% spontaneously mentioning that high prices are eroding their personal finances, the highest reading in a year,” noted Joanne Hsu, director of Surveys of Consumers at the university.
The university’s index of current economic conditions fell 2.1% monthly and 5.3% annually, while the index of consumer expectations decreased 7.5% monthly and 30.6% annually, reflecting a softening in consumers’ outlooks for their incomes and personal finances.
Hsu noted, however, that sentiment for consumers with large stock holdings held steady in September, while respondents with smaller or no stock holdings reported lower sentiment. Results from a recent Gallup poll show 62% of consumers reported owning stocks in 2025, flat from 2024 and on par with 2023 (61%). Only 52% of consumers polled in 2016 owned stocks.
The total year-to-date return for the S&P 500, which includes returns generated by dividends and returns generated by price changes, is currently 13.38%, below 2024’s and 2023’s respective total returns of 25.02% and 26.29%. Total year-to-date return for the Nasdaq composite is currently 16.11%, and 8% for the Dow Jones Industrial Average.
Michigan survey respondents reported feeling particular pressure from the prospect of higher inflation as well as the risk of weaker labor markets. Rising prices at the checkout counter are not a figment of consumers’ imaginations, either.
Inflation as measured by the personal consumption expenditures index, the Federal Reserve’s preferred measure of inflation, rose 0.3% from July and 2.9% year over year in August, according to new data published Friday by the U.S. Bureau of Economic Analysis (BEA).
The seasonally adjusted consumer price index, another widely studied measure of inflation, rose in August at its fastest pace since January, with the 2.9% increase driven by rising housing and grocery costs.
The BEA figures also showed a monthly rise in consumer spending from 0.5% in July to 0.6% in August. Respondents to Michigan’s consumer sentiment survey in August reported intentions to reduce spending, somewhat contrasting the BEA’s latest estimates.
