Washington (awp / afp) – US consumer confidence strengthened at the end of September, slightly exceeding analysts’ expectations, according to the second estimate of the University of Michigan survey released on Friday.
The index stands at 72.8 points, against 71 points for the previous estimate and 70.3 for August. Analysts expected consumer sentiment to remain at the 71-point level.
“Consumer confidence increased slightly at the end of September, but we are still in the persistence of a weakening of optimism, initially triggered by the Delta variant of Covid-19 and supported by the persistence of inflation”, underlines Richard Curtin, the economist in charge of the survey which is very popular with the markets.
On the positive side, while consumption is the locomotive of the US economy, “consumers do not consider economic conditions conducive to the establishment of an inflationary psychology,” adds the economist. “Instead, consumers favor postponement (of purchases) because they still see price developments as a transitory rise.”
But even if it is temporary, inflation has already lowered the purchasing power of households, the survey noted, noting that only 18% of them expect income gains above the expected rate of inflation.
Inflation in the United States accelerated in August to 4.3% over one year, but it remained stable compared to the previous month (+ 0.4%), according to the PCE index released on Friday.
Household income rose 0.2%, a marked slowdown from the 1.1% increase recorded the previous month. Their spending rose 0.8%, almost in line with analysts’ expectations.
The University of Michigan survey also notes that the wait-and-see attitude of American consumers, who delay their purchases, may be reinforced by uncertainties over federal policies and partisan bickering in Congress.
A standoff in Washington over funding the Biden administration’s massive economic programs poses the threat of a U.S. default if the debt ceiling is not raised.
afp / al
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