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Consumer sentiment surges due to lower gas prices
CNN • • business
Key Points:
- Lower gas prices in early October boosted American consumer sentiment to its highest level since February, according to the University of Michigan’s survey, with a 10% increase to a preliminary reading of 54.4.
- Despite the rise, overall sentiment remains 12% below last year’s level, reflecting ongoing frustrations with high prices and uncertainty due to the escalating conflict between the US and Iran in the Middle East.
- Consumer spending growth remains modest, with June retail sales up 0.2%, and labor market conditions stay strong with unemployment at 4.2%, supporting continued spending despite mixed economic feelings.
- Inflation expectations have eased slightly to 4.2% for the coming year but remain elevated compared to pre-conflict levels, indicating persistent concerns about the cost of living.
- While some critics question the survey’s portrayal of consumer pessimism, the survey director defends its methodology and notes that economic perceptions have shifted significantly since the pandemic.
