Stock market turmoil, fears of an attack on Iraq and a stagnant job market soured US consumer sentiment for a fourth month in September, signaling that a recovery underpinned by consumers may be at risk.
The University of Michigan's final September consumer sentiment index fell to 86.1 from 87.6 in August, market sources said today. That was slightly above economists' forecasts for a reading of 85.9 and only a sliver lower than the preliminary take of 86.2 released mid-month.
So far consumer spending, which drives about two-thirds of the US economy, has remained robust, in part from the lowest interest rates and mortgage rates in more than a generation.
While consumer sentiment can give clues on future spending patterns, Fed policymakers have maintained they are more interested in what consumers do, not what they say.
The current conditions index for September, which correlates more closely with spending, fell to 95.8 from 98.5 in August. The preliminary reading was 95.9. The expectations index, which measures attitudes about the 12 months ahead, fell to 79.9 from 80.6 in August. The preliminary reading was 80.0.
The University of Michigan consumer sentiment survey is based on telephone interviews with about 500 Americans across the country on personal finances and business and buying conditions. The University releases the data directly to subscribers only and they are obtained through market sources.