Consumer confidence dips in September amid inflation concerns

U.S. consumer sentiment dipped to a four-month low in September amid rising inflation rates and mounting cost-of-living concerns, according to survey results released Friday.

The University of Michigan Surveys of Consumers index found that consumer confidence slipped to a reading of 48.1 in September, a 7 percent decrease from August and 15 percent less than in January.

The measure uses how people feel about personal finances, as well as the broader economy, to predict future spending — which accounts for the bulk of U.S. economic activity.

Consumer sentiment largely declined across the political spectrum, with both Republicans’ and Democrats’ confidence down from January. Republican sentiment in September is 20 percent lower than in January, while Democrats are down 13 percent over the same period, according to the survey.

Joanne Hsu, the director of Surveys of Consumers, cited renewed worries over rising fuel prices and reescalation of trade disputes as primary factors driving the downturn in American consumers’ confidence.

“Overall, interviews reveal broad agreement across demographic and political groups that the outlook for the economy has softened over the course of the year,” she said in a statement.

She also noted that, after declining for two months, the number of interviewees who spontaneously referenced gasoline when asked about the economy increased in September to 31 percent.

The effective shutdown of the Strait of Hormuz, through which 20 percent of the world’s oil is exported, has led to sharply rising gas and diesel prices as the U.S.’s war with Iran rages on. The national average for gas reached $4.49 per gallon as of Friday, $1.34 higher than last year’s average, according to AAA . Meanwhile, diesel’s price per gallon reached $6.50.

“In fact, consumers do not believe that relief from high gas prices is on the horizon; they broadly expect gasoline prices to continue rising in both the short and long run,” Hsu said.

An Emerson College poll found 60 percent of U.S. adults said they believe President Trump’s policies are making the economy worse. The number is higher compared with Emerson College’s 100 Day Poll from April 2025, in which 49 percent of respondents said Trump’s decisions had negatively impacted the economy.

The Michigan survey reported inflation expectations jumped from August to September, from 4 percent to 4.6 percent. The percentage also exceeds February’s reading of 3.4 percent, before the U.S. and Israel launched strikes against Iran, as well as expectations rates for all of 2024.

Long-run inflation expectations ticked up in September to 3.4 percent from three consecutive months at 3.3. These expectations are higher than 2024 readings , which ranged from 2.8 percent to 3.2 percent.