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Consumers More Optimistic About Economy in September

lisasheppard | September 27, 2016

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The Index of consumer sentiment remained unchanged in September at 89.8%.  There was no change from the previous month, but it does represent a 3% increase from last year.  The index of consumer expectations increased to 81.1%, up 3% from last month and up 3.7% from last year.

Modest gains in the outlook for the national economy have been offset by small declines in income prospects as well as buying plans.

An article by Jill Mislinski for Advisor Perspectives explains what this means historically:

The Michigan average since its inception is 85.4. During non-recessionary years the average is 87.6. The average during the five recessions is 69.3.

“While income gains expected during the year ahead have edged upward, declines in inflation expectations were the main reasons future financial prospects improved, as both near and long term inflation expectations fell to near record lows,” Curtin said. “Nonetheless, buying plans suffered from the perception that no additional price discounts would be offered.”

“Even the more optimistic outlook for the economy had little if any impact on the expected growth rate in new jobs,” he said. “Importantly, all of these changes were relatively minor. Overall, consumers remain reasonably optimistic about their economic prospects. Real personal consumption expenditures can be expected to grow by 2.6% through mid 2017.”

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