NEW YORK (Reuters) - Consumer sentiment unexpectedly worsened in early September to its weakest level in more than a year, as distress over jobs and finances intensified among upper-income families, a survey released on Friday showed.
The Thomson Reuters/University of Michigan’s preliminary September reading on the overall index on consumer sentiment came in at 66.6, down from 68.9 in August.
“Confidence edged downward in early September, as consumers judged prospects for the national economy less favorably,” the survey’s director Richard Curtin said in a statement.
The latest sentiment figure was the lowest since August 2009 and fell short of the median forecast of 70.0 among economists polled by Reuters.
The entire decline in the sentiment index was recorded among households with incomes above $75,000, while confidence among lower-income families improved, the survey showed.
Curtin said the divergence between the two income groups likely stemmed from worries over a protracted delay to an extension of federal tax cuts to families with incomes above
The survey’s barometer of current economic conditions was 78.4 in early September, flat versus 78.3 in August. It came in below a forecast of 79.0.
The survey’s gauge of consumer expectations unexpectedly slipped to 59.1, the lowest since March 2009. This was below August’s 62.9 and a predicted reading of 64.2.
The measure on consumers’ 12-month economic outlook plummeted to 59 in early September, the lowest since April 2009. It was down 10 points from August.
As tax worries have eroded upper-income consumers’ confidence in recent weeks, the survey showed overall job anxiety held steady at its elevated levels.
Consumers, given their economic anxiety, believed prices will fall over the next 12 months.
The survey’s one-year inflation expectations measure fell to 2.2 percent from 2.7 percent August. This was the lowest reading since last September with nearly a third of consumers surveyed expecting deflation or a zero inflation rate during the year ahead.
But the survey’s five-to-10-year inflation outlook index was unchanged from August at 2.8 percent.
Reporting by Richard Leong, Editing by Chizu Nomiyama