What Is the University of Michigan Consumer Sentiment Index?

The University of Michigan’s Surveys of Consumers is a monthly telephone survey of approximately 500 consumers across the United States. Respondents are asked about their personal financial situation, their expectations for the broader economy, and their assessments of buying conditions for large items such as homes, cars, and major appliances. The resulting composite index has been published continuously since 1952 and is regarded as one of the longest-running and most authoritative measures of US consumer confidence.

The survey produces two releases each month: a preliminary reading (the second Friday of the month) based on approximately 60% of the responses collected, and a final reading (the fourth Friday) incorporating the full sample. The final release also includes sub-indices covering current economic conditions and consumer expectations. Long-run inflation expectations, a component of the survey, receive particular attention from Federal Reserve policymakers as an indicator of whether consumers believe inflation is becoming entrenched.

The index has a long-run average of approximately 84.5, measured since 1952. Readings below 70 are generally associated with recessionary conditions or acute economic uncertainty. In May 2026, the final reading fell to a record low of 44.8, reflecting the severe pressure on household confidence from elevated consumer prices, Strait of Hormuz supply disruptions, and geopolitical uncertainty, according to the University of Michigan’s report.

Consumer Sentiment: September 25, 2026

The September 25 release will represent the final sentiment reading for September 2026. This release falls at the tail end of one of the most turbulent periods for consumer confidence in the survey’s history. The index has been trading at record or near-record lows throughout 2026, driven by high fuel prices, persistent goods inflation, and household concern about the economic outlook.

Consensus estimates for the September 2026 final release are not yet available. Market expectations will be shaped by the preliminary reading (due on September 11, 2026), developments in energy markets, retail price trends, and any significant shifts in the labour market between now and the release. The trajectory of mortgage rates, gasoline prices, and any easing or worsening of geopolitical tensions will be the primary determinants of whether confidence begins to recover from its historic lows.

The FOMC Rate Decision on September 16, 2026 will also influence sentiment heading into the final reading, as any shift in the Fed’s stance on rates will directly affect household borrowing costs and the financial outlook for consumers. A more dovish signal from the Fed could provide a modest confidence boost ahead of the September 25 survey completion.

Why This Release Matters

Consumer confidence is a leading indicator of household spending, which accounts for approximately 70% of US gross domestic product. A sustained decline in sentiment typically precedes a pullback in discretionary spending, and the record-low readings of 2026 have raised concerns about the resilience of the consumer sector. Markets monitor the UMich index alongside the Conference Board Consumer Confidence Index as a real-time gauge of how households are reacting to macro conditions.

The inflation expectations components of the survey carry special weight for the Federal Reserve. Long-run inflation expectations that become unanchored — that is, move materially above 2.5% — could prompt a more hawkish response from the FOMC, even if headline inflation appears to be moderating. Conversely, declining expectations signal that consumers believe price pressures are temporary, giving the Fed more flexibility to ease policy. The September 2026 reading will therefore feed directly into the debate about when and how aggressively the Fed moves toward rate cuts.

For equity markets, the index provides insight into consumer-facing sectors. Retailers, travel companies, restaurant chains, and auto manufacturers tend to react most directly to sentiment readings, as these industries are most sensitive to discretionary spending decisions. The August 2026 UMich reading will provide the most recent context by the time markets prepare for the September survey.

What to Watch For

• Above consensus — A recovery in the headline index above recent lows would signal that household confidence is beginning to stabilise. A move toward 50 or higher would be seen as meaningfully positive for consumer-facing equities and could shift expectations about the pace of economic recovery. Long-run inflation expectations declining toward 3% would be broadly welcomed by the Fed.
• In line with consensus — A reading matching the preliminary estimate would confirm the trend without providing a new directional impulse. Markets would focus on the inflation expectations sub-indices and any differences between the current conditions and future expectations components.
• Below consensus — A deterioration from already historic lows would raise recession concerns and weigh on consumer discretionary equities. If accompanied by rising long-run inflation expectations, it would present the Fed with a difficult stagflationary signal.

Historical Context

Source: University of Michigan Surveys of Consumers. Long-run average: 84.5. All-time high: 111.4 (January 2000). All-time low: 44.8 (May 2026).

Market Positioning

Consumer sentiment has been under sustained downward pressure throughout 2026, with the index setting successive record lows. The primary drivers identified by University of Michigan researchers are concerns about energy prices (driven in part by Strait of Hormuz supply disruptions), the ongoing elevated cost of essential goods, and uncertainty about the economic outlook. As of early June 2026, the index stands approximately 47% below its long-run average, reflecting conditions comparable to the depths of the 2008-2009 financial crisis, though for different underlying reasons.

Any meaningful improvement in energy prices, a dovish signal from the Federal Reserve, or easing of geopolitical tensions could provide the catalyst for a sentiment recovery between now and September. Conversely, a further deterioration in conditions would test the floor of the index further. The US CPI Report September 2026 will be released the week before this final reading and will shape expectations significantly.

Related Events This Week

• US CPI Report September 2026 — Inflation data released the week before will directly influence what consumers tell the UMich survey about price pressures and inflation expectations.
• FOMC Rate Decision September 2026 — The Federal Reserve’s September 16 policy decision on interest rates will affect household borrowing conditions and may shift the mood heading into the final survey days.
• US Personal Income and Outlays (PCE) September 2026 — The PCE data, released the same week, will show actual consumer spending alongside sentiment, providing a test of whether low confidence is translating into spending restraint.

Frequently Asked Questions

What does the University of Michigan Consumer Sentiment Index measure?

The index measures household perceptions of their personal financial situation, current buying conditions, and expectations about the broader economy over the next year and five years. Based on monthly telephone surveys of approximately 500 US consumers, it has been published continuously since 1952 and is one of the most widely cited consumer confidence measures globally.

When is the September 2026 final reading released?

The final reading of the University of Michigan Consumer Sentiment Index for September 2026 is scheduled for Friday, September 25, 2026, at 10:00 a.m. Eastern Time. A preliminary reading will be published on Friday, September 11, 2026, giving markets an early indication of the month’s trend.

How does consumer sentiment affect financial markets?

A strong sentiment reading typically supports consumer discretionary equities — retailers, restaurants, travel, and automotive sectors — while a weak reading tends to weigh on these stocks and may support bond prices as investors price in slower economic growth. The Federal Reserve also monitors the survey’s inflation expectations sub-components closely: rising long-run expectations signal entrenched inflation concerns and may influence the pace of monetary policy decisions.