U.S. consumer sentiment index increases much more than expected in early September

A report from the University of Michigan revealed on Friday the preliminary reading for the Reuters/Michigan index of consumer sentiment increased 6.5 percent m-o-m to 78.9 in early September. This was the highest reading since March.

Economists had expected the index would rise to 75.0 this month from August’s final reading of 74.1.

According to the report, the index of current U.S. economic conditions surged 5.5 percent m-o-m to 87.5 in September from 82.9 in the previous month. Meanwhile, the index of consumer expectations climbed 7.0 percent m-o-m to 73.3 this month from 68.5 in August.

“While the recent gain was consistent with an unchanged flat trend, the data indicated that the election has begun to have an impact on expectations about future economic prospects”, noted Surveys of Consumers chief economist, Richard Curtin. “Over the next several months, there are two factors that could cause volatile shifts and steep losses in consumer confidence: how the election is decided and the delays in obtaining vaccinations. While the end of the recession will depend on these non-economic factors, the hardships endured by consumers can only be offset by renewed federal relief payments,” he added.