Consumer Sentiment Improves, Still At Low Reading

Consumer sentiment did improve in the last half of September to lift the month's final index 1.2 points from mid-month to a better-than-expected 93.2, yet this is still among the very lowest readings of the last three years. Nevertheless against August, the index is up a tangible 3.4 points with improvement posted by both current economic conditions, at 108.5 and up more than 3 points from August, as well as expectations, also up more than 3 points to 83.4. Inflation expectations are mixed, with the year-ahead reading up 1 tenth to a still modest 2.8 percent and 5-year expectations down 2 tenths to a subdued 2.4 percent.

The rival consumer confidence report (data posted Tuesday of this week) showed a sharp decline in September to bring these two reports more in line with each other, that is struggling to hold steady in a year that has seen major trade frictions and general slowing for domestic manufacturing. Yet consumer spending has remained strong, at least so far this year though today's data on August consumer spending, despite strength in durable spending, did come up short of expectations.