Consumer sentiment slides to a record low as Cohn says Americans are drawing down savings

The Michigan index fell again in September while inflation expectations rose, and a former White House economic adviser says households are funding spending out of savings.

Assembled by Claude from 8 sources at 7 outlets · Sunday, September 20, 2026, Evening edition, 5:12 PM EDT · no human byline

What happened

Gary Cohn, vice chairman of IBM, said on CBS's Face the Nation that consumer sentiment has turned quite negative in the United States, pointing to rising gas prices, concerns about AI and high costs cbsnews.comyahoo.com. In the programme transcript he added that the unknowns of AI are themselves worrying people cbsnews.com. He also said Americans are using savings to maintain their spending as inflation and energy prices weigh on sentiment ua.news. His account ties three separate pressures together: fuel costs, the general price level, and uncertainty about what AI does to employment cbsnews.comcbsnews.com.

The survey data run the same way. The University of Michigan's Consumer Sentiment Index dropped to 47.8 from 51.7 in August, a fall of 13.2% from a year earlier, while one-year inflation expectations jumped to 4.6 furnituretoday.com. The final September reading was due at 10:00 a.m., after a preliminary print that had already declined from the August level tradingkey.com.

Why it matters to investors

Spending funded from savings rather than income is the mechanism to watch, because it can hold consumption up for a while and then stop ua.news. Business Insider set out the same sequence, describing a slowdown in consumer spending as Americans pull back amid higher inflation, sluggish income growth and geopolitical uncertainty businessinsider.com.

The gap between the survey and the market is unusually wide. Goldman Sachs tied falling happiness and trust in institutions to record-low Michigan sentiment even as GDP and equities held up relatively well briefs.co. A sentiment index at 47.8 sits well below the level that normally accompanies a growing economy furnituretoday.com, and the divergence is the thing that resolves one way or the other. Business Insider's framing puts the resolution on the spending side, with the pullback arriving through weaker income growth rather than through a single shock businessinsider.com.

What to watch

Inflation expectations are the component with the most direct policy consequence. The one-year reading jumped to 4.6 in the same survey that recorded the sentiment drop furnituretoday.com, which is the series the Federal Reserve watches for evidence that price pressure is becoming self-reinforcing.

The second thing to track is the savings drawdown Cohn described ua.news. If households stop supplementing income with savings, the spending that has so far held GDP up starts to give way businessinsider.combriefs.co. The final Michigan print for September, due after the preliminary decline, is the immediate datapoint tradingkey.com, with the gas prices Cohn named as the most visible input cbsnews.comcbsnews.com.

Sources

1. cbsnews.com: IBM vice chairman Gary Cohn says " consumer sentiment has turned quite negative" in U.S. (2026-09-20)
2. cbsnews.com: Transcript: IBM vice chairman Gary Cohn on "Face the Nation with Margaret Brennan," Sept. 20, 2026 (2026-09-20)
3. ua.news: Gary Cohn says Americans' savings are shrinking — CBS News (2026-09-20)
4. yahoo.com: IBM vice chairman Gary Cohn says " consumer sentiment has turned quite negative" in U.S. (2026-09-20)
5. furnituretoday.com: What are consumers waiting for? Maybe a compelling reason | Sheila Long O'Mara (2026-09-20)
6. tradingkey.com: The Week Ahead: US-China Summit in Washington, Costco Earnings and Fed Rate Path in Focus (2026-09-20)
7. briefs.co: Goldman: Happiness Slump Hits Consumer Sentiment - Briefs Finance (2026-09-20)
8. businessinsider.com: Slower Consumer Spending , Fed Interest Rate Hikes Will Hurt US Economy (2026-09-20)