US consumer sentiment falls to 48.1 in September, lowest since May

September 25, 2026 at 08:33 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

US consumer sentiment fell to 48.1 in September from 51.7 in August, according to the University of Michigan survey. Consumers' year-ahead inflation expectations jumped to 4.6% from 4.0%, the highest since June. The decline came as gas prices rose more than $1.50 on average since the start of the war with Iran.

Key Facts

The University of Michigan's consumer sentiment index fell to 48.1 in September from 51.7 in August.
Year-ahead inflation expectations rose to 4.6% in September, the highest since June.
Gas prices have increased by more than $1.50 on average since the start of the war with Iran, according to AAA.
Long-term inflation expectations increased to 3.4% in September, ending three consecutive months at 3.3%.
President Trump placed 50% tariffs on about $20 billion worth of Canadian goods after US-Canada talks collapsed in late August.

Consumer Sentiment Decline

The University of Michigan's consumer sentiment index fell to 48.1 in September from 51.7 in August. Consumers' expectations for their personal finances weakened by about 10%. The reading was slightly above the Street's expectation of 47.5. Joanne Hsu, the survey's director, said the short-run outlook for business conditions plunged amid renewed worries that elevated fuel prices and re-escalating trade disputes could pass through to the economy as a whole. Hsu added that consumers' outlook for the economy has weakened across the political spectrum since the start of the year.

Inflation Expectations

Year-ahead inflation expectations jumped to 4.6% in September from 4% in August, marking the highest reading since June. That is far higher than inflation expectations of 3.4% seen in February and all readings in 2024. Long-term inflation expectations increased to 3.4% in September, ending three consecutive months at 3.3%. In recent months, long-term expectations have consistently remained above the 2.8%-3.2% range seen in 2024.

Gas Prices and Tariffs

Gas prices have increased by more than $1.50 on average since the beginning of the war with Iran, according to AAA, and are now creeping toward $5 per gallon nationwide. In California, average prices are above $6 per gallon. Following talks that had collapsed between the US and Canada in late August, President Trump placed 50% tariffs on about $20 billion worth of Canadian goods. This week, Treasury Secretary Scott Bessent announced that the US and China would extend their current trade truce, with talks set to continue in early 2027.