NEW YORK – U.S. consumers' mood brightened slightly more than expected in September, a report showed Friday, and their inflation expectations slipped.
The University of Michigan's final reading on consumer sentiment in September was 85.4, above both an initial mid-month reading of 84.4 and August's final reading of 82, said sources who saw the subscription-only report.
The median forecast of Wall Street economists polled by Reuters was for a reading of 85. Most analysts attributed a rise in the survey to lower energy prices.
"I am not surprised that the consumer confidence is a little bit better than expected because people are seeing pump prices of gasoline come down," said James Glassman, chief U.S. economist at J.P. Morgan Chase in New York. "I am sure that is encouraging, but whether that means they spend or not, consumer confidence doesn't tell. It's more of a poll about how people feel about the world."
U.S. Treasury prices traded lower after news of a weak reading on Midwest manufacturing, while stocks were little changed and the dollar held slight gains against the euro and the yen after the reports were released.
The survey's index of current conditions fell to 96.6 in September from 103.8 in August, while consumer expectations rose to 78.2 from 68.0 in August.
Consumer spending accounts for about two-thirds of U.S. economic activity, but in recent years confidence measures have been a weak guide to actual spending.
Consumers' expectations for inflation over the next 12 months fell, the report said, according to the sources.
"Inflation expectations remain low, stable with indications earlier this month and lower than last year," said Keith Hembre, chief economist at FAF Advisors in Minneapolis.
The University of Michigan's preliminary September reading on one-year U.S. inflation expectations was 3.1 percent, down from 3.8 percent in August.
Median expectations for inflation over a five-year horizon fell to 3.0 percent from 3.2 percent in August.