US consumer sentiment falls to 48.1 as inflation expectations climb

The University of Michigan survey’s headline index landed at 48.1 in September, down from 51.7 in August¹. The final reading of 48.1 was a four-month low, against 51.7 the month before³. The Surveys of Consumers index fell to that final reading of 48.1 from 51.7⁴. The index declined less than expected². Consumer sentiment ticked lower in September on the headline measure¹.

It was another sub-50 score, and represents a 12.7% decline in consumer sentiment from September 2025, with survey director Joanne Hsu pointing to buying conditions⁵. One account described the reading as the second lowest on record¹⁰. The survey was released on Friday⁸. Consumer sentiment slipped to a four-month low over the month⁸.

What sits under the number

Year-ahead inflation expectations leapt to 4.6% in September, rising from 4% the month before⁶. Consumer sentiment reached its lowest reading in four months and ticked down 15 percent from January⁷. US consumer sentiment sank amid high prices⁷. The move from 4% to 4.6% in year-ahead expectations came in the same release as the headline drop to 48.1^1,6.

Confidence fell sharply, with Americans voicing fresh fears about prices, in a week when the administration was promoting its economic record before the midterms, and with prices up 3.4%⁹. The survey’s long historical arc underscores how anomalous the current level is, with Americans now feeling worse about the economy than at most points it covers¹⁰.

What to watch

Sentiment slipped amid worries that rising inflation would erode households’ purchasing power⁸. That is the channel that matters for spending, and it is the same inflation-expectations argument Fed officials have been making in public^6,8.

Markets did not follow the survey lower. US stocks closed higher on the day as oil prices pulled back². Nor did the business-spending data: core capital goods orders pointed to robust growth in business spending on equipment in the same run of releases that carried the sentiment reading^3,4. The open question is whether the gap between weak sentiment and resilient activity closes, and from which side^4,10. The reading has stayed below 50 for a run of months, which makes the level, rather than the monthly change, the thing to watch⁵. Headline goods orders pointed to robust growth, on the same day the sentiment index printed at 48.1^3,4. Prices were up 3.4% as the administration pushed its economic record before the midterms⁹.