US consumer sentiment has increased for a second month but remains relatively low

Americans’ confidence in the economy saw an increase for the second consecutive month in September, attributed to more affordable prices on durable goods like vehicles and furniture. The University of Michigan’s consumer sentiment index rose to 69 in its initial reading, up from 67.9 in August, marking the highest level since May. This upturn follows a low point in June 2022, coinciding with a peak in inflation at 9.1%. Since then, the index has climbed by approximately 40%, yet it remains notably lower than pre-pandemic levels.

Joanne Hsu, the director of consumer surveys at the University of Michigan, noted that consumers are still exercising caution due to significant uncertainty surrounding the upcoming election. Despite the uptick in consumer confidence, which can sometimes indicate a willingness to spend more, Americans have generally maintained a robust spending pattern, even in the face of subdued survey-measured confidence.