Consumer sentiment ends September at a very healthy 100.1, down slightly from 100.8 at mid-month and sharply higher from August's 96.2. Lower income households lead September's gain to offset downward pull from higher income households in a result which suggests, according to the report, that the expansion has now benefited nearly all population groups.
Income optimism across all groups is the strongest since 2004 and is getting a lift from declining inflation expectations and, with this, the prospect of rising spending power. And despite concerns over tariffs, which were cited by nearly 1/3 of the sample, consumers see economic growth continuing and unemployment falling. Note that among those who cite tariffs as a concern, confidence is generally lower.
Though low inflation expectations may be a positive for income prospects, they nevertheless could be a concern for the Federal Reserve if expectations begin to substantially erode. Year-ahead inflation expectations are down 1 tenth this month at 2.7 percent with 5-year expectations up 1 tenth at 2.5 percent.
Other readings in today's report include a 115.2 level for current conditions, vs 110.3 in August and 116.1 at mid-month September, and 90.5 for expectations vs August's 87.1 and 91.1 at mid-month.
Expected to hold at the preliminary score, Econoday's consensus for the final consumer sentiment index for September is expected to come in at 100.8. The preliminary report proved the strongest since March, reversing softening in prior months on rising assessments of both current conditions and expectations.