U.S. Consumer Sentiment Slides Again in September as Inflation Concerns Linger — Evening Brief – 09.12.25  

U.S. consumer sentiment fell for the second straight month in September, according to preliminary data from the University of Michigan survey, highlighting growing unease about the economy, jobs, and inflation. The index fell to 55.4 from 58.2 in August—well below the median estimate of 58.0 and lower than even the most pessimistic forecasts. 

Both major components of the index deteriorated: Current Conditions slipped to 61.0 from 61.7, while Expectations dropped more sharply to 51.8 from 55.9. The decline underscores mounting anxiety that economic pressures are spreading from high prices to the labor market. 

“Consumers’ expected probability of personal job loss grew sharply this year and ticked up in September as well,” said Joanne Hsu, director of the survey. “This suggests that consumers are indeed concerned that they may be personally affected by any negative developments in labor markets.” 

At the same time, inflation remains a persistent pressure point. “Consumers also feel squeezed by the persistence of high prices,” Hsu noted. One-year inflation expectations held at 4.8%, elevated after July’s increase from 4.5%. More troubling for policymakers, long-run (5–10 year) inflation expectations rose to 3.9% from 3.5% in August, defying forecasts for a decline to 3.4% and marking the highest level since June. 

The combination of slumping sentiment, rising job-loss fears, and resurgent inflation expectations complicates the Federal Reserve’s policy path. With the Fed poised to cut rates next week, the data highlights the delicate balance between supporting growth and anchoring inflation expectations—a challenge made harder by consumers’ waning confidence in both their personal finances and the broader economy.