Americans are feeling more optimistic about the US economy this month due to slower inflation. The University of Michigan’s latest consumer survey showed an improvement in attitudes toward the economy, with sentiment rising 2% from August. This increase broke a trend of consumer sentiment mostly remaining steady, with only a modest rise last month. Despite the improvement, sentiment still remains below pre-pandemic levels, although it is 40% higher than the record low reached in June 2022 when inflation was high.
Consumer sentiment rose to its highest level since May 2024, increasing for the second consecutive month. The gain was led by an improvement in buying conditions for durables, driven by more favorable prices perceived by consumers. The survey also showed that a growing number of both Republicans and Democrats anticipate a win for Vice President Kamala Harris in the upcoming November election. This comes after Harris and former President Donald Trump participated in their first presidential debate, where they debated various issues.
In addition to feeling more optimistic about the economy, US consumers also expressed more positivity regarding future inflation rates. Expectations for inflation in the upcoming year decreased for the fourth consecutive month in September, reaching its lowest level since December 2020. This suggests that consumers are more confident in the economy and believe that inflation will remain under control in the near future.
The overall sentiment among Americans reflects a sense of confidence in the economy following a period of uncertainty and concern, particularly around inflation rates. The improvements in consumer sentiment indicate that people are feeling more hopeful about the future and are seeing positive signs in various economic indicators. The anticipation of a win for Vice President Harris in the upcoming election further contributes to this sense of optimism among both Republicans and Democrats.
As the story continues to develop, it will be interesting to see how these trends evolve and whether consumer sentiment continues to improve in the coming months. The impact of key economic factors, such as inflation rates, on public perception will be important to monitor as the US economy navigates through various challenges. Overall, the current data suggests a more positive outlook among Americans, signaling a potential recovery in confidence and economic stability.
