Concerns About Hurricanes Dent American Consumer SentimentBy
Michigan’s preliminary sentiment index fell to 95.3 from 96.8
Report was first to broadly capture impact of Harvey, Irma
U.S. consumer sentiment dipped in September as Americans expressed concern about the economic and inflationary impact of Hurricanes Harvey and Irma, University of Michigan survey data showed Friday.
Highlights of Michigan Sentiment (September)
The figures are the first to broadly capture the effects of Harvey and Irma, which caused more than $100 billion in damage and sparked a jump in claims for unemployment benefits.
Many people in Houston and Florida couldn’t be interviewed, meaning the report may be slightly biased toward the positive, survey Director Richard Curtin said. Only 9 percent of respondents spontaneously said the storms would hurt the economy, though Curtin said the disasters may have been on the minds of many more people than that. The sentiment index was unchanged among consumers who didn’t mention the storms.
Consumers expected slight increases in gasoline prices and inflation, as Harvey temporarily shuttered refineries in Texas. Policy makers don’t expect the disasters to have a long-term effect on the economy, as reconstruction later in the year should offset their negative impact on third-quarter growth. A little over half of consumers reported improved finances for the fourth straight month, the highest percentage since November 2000.
Meanwhile, President Donald Trump is stepping up efforts to promote tax cuts that he says will benefit the middle class and boost an already-tight labor market. Most consumers said the economy had improved of late, with just one in five expecting conditions to deteriorate in the coming year. Only 25 percent of respondents expected an increase in unemployment, which is hovering near a 16-year low.
“It is likely that without the hurricane we would have been at least as good as we were last month, but we’re at very high levels,” Curtin said in a webcast after the report’s publication. “I don’t think we would have seen a decline, and perhaps a one- or two-point rise in the index in September if these hurricanes had not happened, but of course there’s no way of telling.”
- Among homeowners, 68 percent said their home values had increased, the highest proportion in a decade
- Consumers saw inflation rate in the next year at 2.7 percent, compared with 2.6 percent in the prior month
- Inflation rate over next five to 10 years seen at 2.6 percent after 2.5 percent in August