By Ruth Mantell, MarketWatch
WASHINGTON (MarketWatch) — A gauge of consumer sentiment is at its highest level in four months, led entirely by expectations, according to data released Friday
The University of Michigan-Thomson Reuters consumer-sentiment gauge rose to a final September reading of 78.3 — the highest since May — from 74.3 in August. Economists polled by MarketWatch had expected the final reading to rise to 79.5, supported by higher stock prices. A preliminary September reading pegged the sentiment level at 79.2. See economic calendar.
“The improvement was due to a reduction in their debt levels and an increase in the value of their assets, primarily because of rising stock prices and home values,” said Richard Curtin, the survey’s chief economist. “Nonetheless, consumers anticipate a rocky economic road ahead. Small wage increases, rising food prices, slowly declining joblessness, higher taxes, and an overall economy that will not expand continuously but suffer some setbacks over the next several years.”
The sentiment gauge, which covers how consumers view their personal finances as well as business and buying conditions, averaged about 87 in the year before the most recent recession. Economists watch sentiment data to get a feel for the direction of consumer spending.
According to the UMich data released Friday, a gauge of consumer expectations rose to 73.5 in September from 65.1 in August. Meanwhile, a barometer of consumers’ views on current conditions declined to 85.7 from 88.7.
Elsewhere Friday, the U.S. Department of Commerce reported that consumer spending growth in August was the strongest in six months. Read more about consumer spending.
Ruth Mantell is a MarketWatch reporter based in Washington.
