By ,
Published January 13, 2015
U.S. consumer sentiment (search) crumbled unexpectedly in early September, a survey showed, as wariness lingers over the jobless recovery and unemployment remains stubbornly high, market sources said Friday.
The University of Michigan (search) 's closely-watched gauge of consumer confidence fell to a preliminary 88.2 in September, from August's final 89.3, the sources said.
Economists polled by Reuters had expected a preliminary median September reading of 90.0.
The survey's index on consumers' current view of the economy fell to 98.9 in September from 99.7 in August, while the index of consumers' future expectations fell to 81.3 from August's final reading of 82.5.
Confidence took a severe beating earlier in the year in the build-up to the U.S.-led war in Iraq, but its steady recovery appears to have stalled as unemployment is stuck near nine-year highs and consumers are worried about job security.
"The University of Michigan consumer sentiment is only mildly negative (for the economy) in that it's a down point," said Cary Leahey, senior U.S. economist at Deutsche Bank Securities.
"The big sticking point in the minds of those surveyed is the job outlook," he said.
While the pace of layoffs has slackened in recent weeks, consumers are aware that not much new hiring has taken place.
The preliminary survey, which is released only to paying subscribers, is taken from the responses from 300 households, while the final survey at the end of the month is taken from another 200 responses.
Analysts monitor sentiment indices to gauge future patterns of consumer spending, which has been a bulwark for the U.S. economy against the downturn, while businesses slashed investment and shed jobs to cut costs.
Data earlier on Friday showed an increase in total U.S. retail sales in August fell far short of economists' expectations, but sales excluding autos showed spending in other sectors is holding up.
The Commerce Department (search) reported that total retail sales rose by just 0.6 percent in August, compared with a forecast for a rise of 1.4 percent percent and July's 1.3 percent rise.
However, excluding autos, sales rose by 0.7 percent in August, after a 1.0 percent rise in July, and almost in line with expectations for a rise of 0.8 percent.
The benchmark 10-year Treasury note galloped higher after the weaker-than-expected reports on sentiment and retail sales, driving yields to one-month lows below 4.20 percent.
https://www.foxnews.com/story/u-mich-consumer-sentiment-sours-unexpectedly