UMich Inflation Expectations Tumbled In September

The headline from the UMich Sentiment survey continues to be inflation expectations which fell once again in September’s final data to 4.7%.

However, that is above expectations of 4.6% and above the flash print of 4.6% from early September.

Source: Bloomberg

At 2.7%, median long run inflation expectations fell below the 2.9-3.1% range for the first time since July 2021.

Inflation expectations are likely to remain relatively unstable in the months ahead, as consumer uncertainty over these expectations remained high and is unlikely to wane in the face of continued global pressures on inflation.

But it does confirm the plunge in inflation expectations across other markets and surveys…

So having got that out of the way, the rest of the survey shows sentiment for consumers across the income distribution has declined in a remarkably close fashion for the last 6 months, reflecting shared concerns over the impact of inflation, even among higher-income consumers who have historically generated the lion’s share of spending.

Finally, the actual headline sentiment survey showed very little progress and in fact weakened intra-month with expectations sliding from 59.9 flash to 58.0 final.