Consumer Sentiment

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According to the University of Michigan Surveys of Consumers, consumer sentiment increased by 0.3 index-points to 71.0 in September 2021. According to Surveys of Consumers chief economist, Richard Curtin, The steep August falloff in consumer sentiment ended in early September, but the small gain still meant that consumers expected the least favorable economic prospects in more than a decade. Just two components posted additional declines: buying attitudes for household durables fell again in early September to a low reached only once before in 1980, and long term economic prospects fell to a decade low. The decline in assessments of buying conditions for homes, vehicles, and household durables left all three near all-time record lows (see the chart), with the declines due to spontaneous references to high prices. Some observers anticipated that the early August plunge in confidence would quickly disappear since it was driven by emotions. Emotions have long been known to speed responses, the so-called fight or flight response, which was the adaptive function they performed in early August. Many other sources of economic data have since shifted in the same direction, and point toward slower growth in consumer expenditures and purchases of housing to the end of 2021.

The Consumer Sentiment Index is a statistical measurement that provides an economic indicator of consumers opinion and optimism of the state of the economy.

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