The University of Michigan’s Consumer Sentiment Index was revised upward to 48.1 in the final September reading, topping the preliminary print of 47.8 and surpassing market expectations of 47.5. Although the final figure exceeded forecasts, overall sentiment fell sharply from August’s 51.7, reaching its lowest level in four months as consumers expressed growing caution regarding the economic outlook and trade tensions.
The report highlighted a significant jump in year-ahead inflation expectations to 4.6%, up from 4.0% in August, while long-run expectations edged higher to 3.4%. Following the release, U.S. equity markets edged higher and the bond selloff paused as investors weighed the modest sentiment beat against the uptick in inflation expectations. The U.S. dollar showed slight strength against major peers in immediate reaction to the data.