U. Michigan: Consumer Sentiment Tanks in September

Consumer sentiment, also known as consumer confidence, measures how U.S. consumers feel about the economy, wages, jobs and their personal finances.

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Updated Sep 11, 2026

Updated on Sept. 11

Consumer sentiment continues to fall amid uncertainty over the war in Iran and rising gas prices.

University of Michigan: Sentiment falls again in September

The University of Michigan’s Index of Consumer Sentiment decreased from August to September, according to initial results for the month released on Sept. 11. The survey indicates consumer sentiment is down 3.9 index points (or -7.5%) to 47.8.

The index is down by 13.2% since last September. Current Economic Conditions registered at 50.9 in September, compared to 51.9 in August. The Index of Consumer Expectations registered at 45.8 for September, compared to 51.5 for August.

Sentiment weakened across political groups, with Democrats and Republicans posting sizable declines while independents were little changed. Inflation worries also picked up sharply: Year-ahead inflation expectations jumped to 4.6% from 4.0% in August, well above the 3.4% reading in February before the Iran conflict began and higher than any reading in 2024.

Conference Board: Confidence Declines in August

The Conference Board’s Consumer Confidence Index report for August (released on Aug. 25) fell by 0.8 points to 89.4 from 90.2 in July. The survey period for the results was Aug. 3-16.

“Consumer confidence moderated slightly in August for a second consecutive month,” Dana M. Peterson, chief economist at The Conference Board, said in a release. “The Expectations Index slipped further into negative territory, which was offset by a moderate rise in the Present Situation Index after declining in the past three months."

The board’s Present Situation Index rose by 6.8 points to 121.2 in August. It measures consumers’ view of business and labor market conditions.

The Expectations Index measures their short-term outlook for income, business and labor market conditions. It went down by 5.8 points to 68.2 in August.

Here are some other findings Peterson highlighted:

Current business conditions: Consumers were mildly positive.

Current labor market: Perceptions improved after three months of moderate declines.

Outlook for business conditions: Consumers became more pessimistic about the next six months.

Outlook for the labor market: Consumers also grew more pessimistic about the next six months.

Household income: Expectations cooled somewhat but remained optimistic overall.

New York Fed: Consumers grow more worried about the economy

The New York Fed’s August Survey of Consumer Expectations, released Sept. 8, shows consumers are feeling increasingly uneasy about the economy. Inflation expectations were mostly steady, but expectations for gas, food, rent and other prices rose. Consumers also expressed more concern about unemployment, with 44.4% expecting the jobless rate to be higher a year from now — the highest reading since April 2020.

Additionally, households were more pessimistic about their finances, with more people saying their financial situation had worsened over the past year and expecting it to get worse over the next year.

The survey was conducted Aug. 3 through Aug. 31.

More findings below.

What is consumer sentiment?

Consumer sentiment, also known as consumer confidence, is an index of how U.S. consumers are feeling about the current and future state of the economy, and all that folds into the economy: the job market, wages, business conditions and their personal finances. It’s a valuable tool for economists, as consumer sentiment can be used as an early predictor of economic changes.

How people feel about the economy can directly impact the economy, because consumers' attitudes often affect how much they spend on things like food, transportation, household goods, entertainment and more.

In 2023, consumers’ personal spending made up 67.9% of the U.S. GDP, or gross domestic product, according to the Federal Reserve Bank of St. Louis. That’s a significant majority of the nation’s GDP, so keeping a close eye on consumer sentiment is key in foreseeing potential economic slumps or rallies.

When the economy is in a recession, consumer sentiment falls. On the flip side, when the economy is expanding, consumer sentiment rises. The index does typically peak before a recession, though.

Unlike other indexes, such as the Consumer Price Index (CPI), consumer sentiment isn’t calculated using spending data or hard figures. Instead, economists rely on two major surveys of consumer confidence: The University of Michigan’s Surveys of Consumers and the Conference Board’s Consumer Confidence Survey.

Each survey collects the general attitudes and opinions of hundreds of U.S. consumers. Then, those opinions are assigned numeric values and aggregated into one number, or index.

What is consumer sentiment like right now?

The University of Michigan’s Index of Consumer Sentiment

Initial results for September from the University of Michigan, released on Sept. 11 show:

The Index of Consumer Sentiment registered at 47.8, down from 51.7 in August.
Current Economic Conditions registered at 50.9, down from 51.9 in August.
The Index of Consumer Expectations registered at 45.8, down from 51.5 down in August.

How the University of Michigan creates its index

The Index of Consumer Sentiment is one of three indexes derived from the University of Michigan’s Surveys of Consumers, which started in 1946. Originally conducted annually, the surveys switched to a monthly cadence in 1978. The surveys have a sample size of roughly 600 people selected randomly from the 48 adjoining U.S. states and the District of Columbia.

The surveys include roughly 50 questions covering personal finances, business conditions and buying conditions. From those surveyed, three indexes are produced: the Index of Consumer Sentiment, the Index of Consumer Expectations and the Index of Current Economic Conditions.

The Index of Consumer Sentiment is the most commonly cited index of the bunch. It’s derived from these five questions:

"We are interested in how people are getting along financially these days. Would you say that you (and your family living there) are better off or worse off financially than you were a year ago?"
"Now, looking ahead: Do you think that a year from now you (and your family living there) will be better off financially, or worse off, or just about the same as now?"
"Now, turning to business conditions in the country as a whole. Do you think that during the next twelve months we'll have good times financially, or bad times, or what?"
"Looking ahead, which would you say is more likely: that in the country as a whole we'll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?"
"About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or bad time for people to buy major household items?"

Historically, the surveys have been conducted by phone. Starting in July 2024, they'll be conducted online, with researchers aiming for 900 to 1,000 respondents.

The Conference Board’s Consumer Confidence Index

Conference Board data for July, released on July 28, shows:

The Consumer Confidence Index fell 1.4 points for June to 90.8.
The Present Situation Index fell by 3.6 points to 114.9.
The Expectations Index remained unchanged at 74.7.

How the Conference Board’s Consumer Confidence Index comes together

The Conference Board’s Consumer Confidence Survey was launched in 1967 as a mail survey conducted every other month. Today, the survey is conducted online, on a monthly basis, with a sample size of roughly 3,000 respondents.

The Conference Board issues a five-question survey to calculate three distinct indexes: the Consumer Confidence Index, the Present Situation Index and the Expectations Index. Once the surveys have been completed, each question is given a relative value. Then, those values are compared against their relative values from 1985 — the survey’s benchmark year, with an index set at 100.

The Consumer Confidence Index is the average index for all five questions. The Present Situation Index is calculated using the average indexes for the first two questions, and the remaining three questions determine the Expectations Index.

Present Situation Index

Respondents’ appraisal of current business conditions.
Respondents’ appraisal of current employment conditions.

Expectations Index

Respondents’ expectations regarding business conditions six months hence.
Respondents’ expectations regarding employment conditions six months hence.
Respondents’ expectations regarding their total family income six months hence.

Consumer Confidence Index

This is the average index for all five questions above.

The Federal Reserve Bank of New York’s Survey of Consumer Expectations

Some highlights from the Federal Reserve Bank of New York’s August Survey of Consumer Expectations, released Sept. 8:

Inflation. One-year inflation expectations held steady at 3.6%, while three-year expectations edged down to 3.2%. Five-year expectations were unchanged at 3.0%.
Prices. Consumers expect gas prices to rise 4.6% over the next year, up 1.7 percentage points from July. Expectations also rose for food, medical care, college tuition and rent.
Jobs. The outlook for the labor market worsened. The perceived probability that unemployment will be higher a year from now rose 1.6 percentage points to 44.4% — the highest level since April 2020. People also became less confident they could find a job if they lost their current one.
Job loss and quitting. Consumers were slightly less worried about losing their jobs, with the perceived probability falling to 13.8%. At the same time, expectations for voluntarily leaving a job rose to 19.5%.
Household spending. Expected spending growth increased to 5.2%, from 4.9% in July.
Credit and debt. Consumers reported that credit was getting harder to access, and the perceived probability of missing a minimum debt payment over the next three months rose to 13.2%.
Financial situation. Consumers grew more pessimistic about their finances, with more households saying their financial situation had worsened over the past year and fewer saying it had improved. Expectations for the year ahead also deteriorated.

How the Federal Reserve Bank of New York conducts its survey

The Federal Reserve Bank of New York’s Survey of Consumer Expectations focuses on expectations about economic outcomes.

The survey, which is conducted by NielsenIQ, launched in 2013. It’s an internet-based survey that asks a rotating panel of 1,300 heads-of-household about their expectations of the economy, as well as their own personal finances related to the following categories:

Inflation:

Inflation expectations.
Inflation uncertainty.
Probability of different inflation outcomes.
Home price change expectations.
Home price change uncertainty.
Commodity price change expectations.

Labor market:

Earnings growth expectations.
Earnings growth uncertainty.
Job separation expectations.
Job finding expectations.
Moving expectations.
Expectations of higher unemployment.

Household finance:

Household income growth expectations. Household spending growth expectations. Change in taxes. Change in credit availability. Debt delinquency expectations. Expectations of higher interest rate on savings accounts. Household financial situation.Expectations of higher stock prices. Government debt growth expectations.

» MORE: Current rate of inflation and why it matters