Concerns About Hurricanes Dent American Consumer Sentiment
U.S. consumer sentiment dipped in September as Americans expressed concern about the economic and inflationary impact of Hurricanes Harvey and Irma, University of Michigan survey data showed Sept. 15.
Highlights of September Michigan Sentiment
鈥 Preliminary sentiment index fell to 95.3 (estimated 95) from 96.8 in August.
鈥 Current conditions gauge, which measures Americans鈥 perceptions of their personal finances, increased to 113.9 from 110.9.
鈥 Expectations measure decreased to 83.4 from 87.7.
Key Takeaways
The figures are the first to broadly capture the effects of Harvey and Irma, which caused more than $100 billion in damage and sparked a jump in claims for unemployment benefits.
Many people in Houston and Florida couldn鈥檛 be interviewed, meaning the report may be slightly biased toward the positive, survey Director Richard Curtin said.
RELATED: Hurricanes to increase contract, spot rates outside disaster areas
Only 9% of respondents spontaneously said the storms would hurt the economy, though Curtin said the disasters may have been on the minds of many more people than that. The sentiment index was unchanged among consumers who didn鈥檛 mention the storms.
Consumers expected slight increases in gasoline prices and inflation, as Harvey temporarily shuttered refineries in Texas. Policy makers don鈥檛 expect the disasters to have a long-term effect on the economy, as reconstruction later in the year should offset their negative impact on third-quarter growth. A little over half of consumers reported improved finances for the fourth straight month, the highest percentage since November 2000.
Meanwhile, President Donald Trump is stepping up efforts to promote tax cuts that he says will benefit the middle class and boost an already-tight labor market. Most consumers said the economy had improved of late, with just one in five expecting conditions to deteriorate in the coming year. Only 25% of respondents expected an increase in unemployment, which is hovering near a 16-year low.
Official鈥檚 Views
鈥淚t is likely that without the hurricane we would have been at least as good as we were last month, but we鈥檙e at very high levels,鈥 Curtin said in a webcast after the report鈥檚 publication. 鈥淚 don鈥檛 think we would have seen a decline, and perhaps a one- or two-point rise in the index in September if these hurricanes had not happened, but of course there鈥檚 no way of telling.鈥
Other Details
鈥⑻鼳mong homeowners, 68% said their home values had increased, the highest proportion in a decade.
鈥⑻鼵onsumers saw inflation rate in the next year at 2.7%, compared with 2.6% in the prior month.
鈥⑻齀nflation rate over next five to 10 years seen at 2.6% after 2.5% in August.
