WASHINGTON, Sept. 12 (Xinhua) -- U.S. consumer sentiment took a hit in September, according to preliminary data released Friday from the University of Michigan. Experts have warned of the weak economy ahead of the midterm elections.
Consumer sentiment receded less than 4 index points for the second consecutive month of decreases, according to the widely watched survey of consumers.
Democrats and Republicans alike posted sizable declines, while Independents were little changed from August. Year-ahead expectations for both personal finances and business conditions plunged, the report found.
With a resurgence in fuel prices and trade tensions, consumers anticipate greater pressures on their pocketbooks to come, according to the report.
Some experts said the report showed a significant decline in sentiment.
Dean Baker, a macroeconomist and co-founder of the Center for Economic and Policy Research, told Xinhua: "This is a big hit to sentiment. Clearly people see a worse situation going forward. This is most likely due to people seeing little prospect of the Iran War ending soon. Sentiment is likely to remain weak until the war ends. It will get much worse if the AI (artificial intelligence) bubble crashes."
Overall, sentiment is now 16 percent below February, prior to the start of the Iran conflict, and 13 percent lower than a year ago.
Year-ahead inflation expectations jumped from 4.0 percent last month to 4.6 percent this month, the highest reading since June. The current reading substantially exceeds the 3.4 percent seen in February before the Iran conflict began. Long-run inflation expectations ticked up to 3.4 percent, ending three consecutive months at 3.3 percent.
This occurs just before the midterm elections, in which Republicans are expected to lose seats due to ongoing inflation in food, groceries, rent and home prices.
Some experts said the weak economy is the most crucial issue for many voters.
Brookings Institution Senior Fellow Darrell West told Xinhua: "The weak economy is the most important issue for many voters, and unless it improves, will drag down Republicans in November. The election is a referendum on (U.S. President Donald) Trump and it does not look like he will fare very well."
Other experts noted that the underlying inflation is also being fed by pressure on oil prices due to the Iran conflict.
Clay Ramsay, a researcher at the Center for International and Security Studies at the University of Maryland, told Xinhua: "Trump's midterm convention is an effort to rouse people who are less likely to vote and get them to the polls. However, inflation is what these occasional voters are most aware of."
"The underlying inflation left over from the post-Covid period is being fed by the Iran war's pressure on oil prices, plus the many tariffs. We are not in a business-friendly or a consumer-friendly environment right now. So urging people to vote who are focused on handling the day-to-day in their lives or small businesses may well backfire on Republicans," Ramsay said. ■
