The S&P 500 (SPX) has remained resilient in the face of a disappointing consumer sentiment update from the University of Michigan. September’s preliminary Index of Consumer Sentiment came in at 55.4, below the estimate of 58.2 and falling from 58.2 in July.
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“Consumers continue to note multiple vulnerabilities in the economy, with rising risks to business conditions, labor markets, and inflation,” said Surveys of Consumers Director Joanne Hsu. “Likewise, consumers perceive risks to their pocketbooks as well; current and expected personal finances both eased about 8% this month.”
Year-Ahead Inflation Expectations Remain at 4.8%
Furthermore, survey respondents expect year-ahead inflation of 4.8%, which is well above August’s annual Consumer Price Index (CPI) and core CPI of 2.9% and 3.1%, respectively. The expectation was unchanged from August.
In addition, long-run inflation expectations grew for a second consecutive month to 3.9%, rising from 3.5% in August and 3.4% in July.
Meanwhile, stocks continue to trade at all-time highs as investors shrug off the data. The resilience suggests that markets are betting the Fed will act to support growth without triggering an economic slowdown.
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