By ,
Published January 13, 2015
U.S. consumer sentiment (search) fell unexpectedly in September, a survey showed Friday, as persistent weakness in the job market, high gasoline prices and the ongoing occupation in Iraq took a toll.
The University of Michigan's final September index of consumer sentiment fell to 87.7, below economists' forecasts of 88.5, from 89.3 in August.
Sentiment dipped heavily from the preliminary reading of 88.2 at mid-month.
Consumer sentiment is still above the nine-year low of 77.6 reached in March at the start of the Iraq war and above its average for the last 12 months.
But the recovery in confidence since the end of major hostilities has fallen flat as the ongoing human and financial costs of the post-war occupation add up.
On Sept. 7, right in the middle of the survey period, President Bush requested $87 billion to fund operations in Iraq and Afghanistan.
"The difficulties currently being faced in Iraq are undermining consumer sentiment, with the $87 billion price tag causing additional concern," said David Sloan, analyst at 4Cast Ltd.
Consumer confidence has also been hurt by the weak jobs market.
"This report, in conjunction with the confidence figures from the Conference Board (search), will probably underscore the concern with regard to the labor market," said Kathleen Stephenson, director of global economics with Credit Suisse First Boston.
According to a Labor Department report on Thursday, new claims for jobless benefits are falling to the point where the U.S. economy might finally be creating jobs.
But high-profile mass layoffs, especially in the manufacturing sector, have fed worries about job security. Tobacco maker R.J. Reynolds and iconic bluejean company Levi Strauss are among those announcing big job cuts.
U.S. Treasury yields fell to two-month lows on the confidence report, which ignited worries that falling consumer sentiment could slow retail sales and hamper the economic recovery. U.S. stocks fell modestly.
Still, economists noted that what consumers say about their mood does not translate to what they do at the shopping mall. Americans have shopped vigorously this year regardless of their mood.
The survey's current conditions index, which tracks consumers' attitudes about their present financial situation, dropped to a final reading of 98.4 from 99.7 in August.
The expectations index, which gauges the 12-month outlook, fell to 80.8 from 82.5 in August and was down for a fourth straight month.
The University of Michigan consumer sentiment survey (search) is based on telephone interviews with 500 U.S. households over the course of the month on personal finances and business and buying conditions. It is released only to paying customers.
The preliminary survey, released about midway through the month, is based on the first 250 interviews.
https://www.foxnews.com/story/september-consumer-sentiment-falls-unexpectedly