US Long-Term Inflation Views Ease Further, Lifting Sentiment

US long-term inflation expectations continued to ease in September, helping slightly lift consumer sentiment from the previous month despite growing economic uncertainty.

Consumers expect prices will climb at an annual rate of 2.7% over the next five to 10 years, the lowest since April 2021, according to the final September reading from the University of Michigan. The initial print for the month was 2.8%.

Respondents see costs rising 4.7% over the next year, up slightly from earlier in the month but still near the lowest in a year, data Friday showed.

However, uncertainty over near-term price views reached a four-decade high, given that energy prices are falling but those for food are rising.

“Inflation expectations are likely to remain relatively unstable in the months ahead, as this uncertainty is unlikely to wane in the face of continued global pressures on inflation,” Joanne Hsu, director of the survey, said in a statement.

The university’s final sentiment index increased to 58.6 from 58.2 in August. The median estimate called for a reading of 59.5 in a Bloomberg survey of economists.

A gauge of current conditions climbed to 59.7, the highest since May. The survey’s measure of future expectations was unchanged at 58.