Washington, DC, United States (4E) – Confidence of American consumers fell to a five-month low in September, a sign that household spending may take a while to pick up.
The consumer-sentiment index compiled by University of Michigan/Thomson Reuters declined to an initial reading of 76.8 in September and the lowest level since April, compared with a final estimate of 82.1 in August.
The latest payroll data shows the smallest back-to-back gains in the year and mortgage interest rates have risen to near two-year high, both factors are weighing on confidence. The slow hiring activity was a drag on consumer spending, which comprises around 70 percent of the nation’s economy.
Economists say sentiment levels provide a snapshot of where consumer spending is heading. A separate government report on Friday shows that retail sales climbed in August.
The Michigan sentiment survey’s current conditions index, which measures Americans’ view of their personal finances, declined to 91.8 in September from 95.2 in August.
The index that measures consumers’ expectations of the next six months fell to 67.2, the lowest level since January, from 73.7 in August.
Recent economic data have been closely watched by investors and analysts as they try to forecast whether the Federal Reserve policy makers see the economy as robust enough to begin scaling back its bond-purchasing program. The central bank could announce its decision as early as next week when officials meet.