President Joe Biden’s attempt to jawbone Americans into being happier with the U.S. economy is not working.
Consumer sentiment fell for the second consecutive month in September, the University of Michigan’s preliminary monthly survey of U.S. households showed on Friday.
The index of consumer sentiment dropped to 67.7 this month from 69.5 in August, the University of Michigan said Friday.
The index had reached its best level in nearly two years in July, giving hope to Democrats that Americans might be getting over their sour mood over the economy. Since then, however, sentiment has been deteriorating slightly.
The average reading for the index is 86.
Expectations for the future improved slightly but views of current conditions fell notably.
Inflation expectations showed signs that U.S. consumers see inflation continuing to fall despite the recent stalling of disinflation.
Joanne Hsu, the director of the survey, said in her statement:
Throughout the survey, consumers have taken note of the stalling slowdown in inflation, but they do expect the slowdown to resume. Year-ahead inflation expectations moderated from 3.5% last month to 3.1% this month. The current reading is the lowest since March 2021 and is just above the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations came in at 2.7%, falling below the narrow 2.9-3.1% range for only the second time in the last 26 months. In comparison, long-run inflation expectations ranged between 2.2 and 2.6% in the two years pre-pandemic.
Data released this week showed that inflation picked up in August and real median household income fell last year, dropping by the most since 2010.