Another negative reading on consumer attitudes in September released Friday led to more questions about the future of spending habits going into the vital holiday season.
The University of Michigan reported that its consumer sentiment index was revised lower than expected for the month, to 94.2 from the previously reported 95.8. Two weeks ago, the index was seen as ticking down to 95.8 in September from 95.9 in August. Economists on Wall Street were expecting a smaller decline, estimating the index would hit 96.
The report followed a surprising drop in the consumer confidence index, reported by the Conference Board Tuesday, and a series of disappointments from the retail sector throughout the month of September.
The Conference Board said its index fell to 96.8 in September from 98.7 in the previous month, after economists predicted a jump to 99.5. On Sept. 14 the Census Bureau said retail sales declined by 0.3% in August, missing the consensus estimate of 0.1%, and September began with a series of disappointing sales reports from major retailers, such as
Consumer spending was a mainstay for an otherwise shaky economy throughout the early years of the decade as record-low interest rates and tax cuts provided consumers with extra cash to burn. Now investors are shifting away from consumer cyclical stocks, out of concern that Americans are finally feeling the pinch from a slow job market and rising interest rates, and scaling back their budgets.
The Morgan Stanley Consumer Index, having shed 4% of its value since Sept. 7, was recently up 0.9% on the day in sympathy with the broader market.