The numbers: Americans had a little more faith in the economy after the first interest rate cut by the Federal Reserve in four years and inflation slowed down, but they were still worried about the outcome of the election.
Friday, the University of Michigan said that the consumer confidence index rose to a five-month high of 70.1 in September. It had been 69.0 in August and 67.9 in September.
Despite this, consumer confidence is still very low. The last time it was this high was after the pandemic, in 2021, when it was 88.3.
“Consumers are fully aware that inflation has continued to slow,” said Joanne Hsu, director of the survey. “However, sentiment remains below its historical average. This is partly because people are frustrated with high prices.”
“Consumers’ hopes for the economy are rising, which seems to be getting people more excited.”
Important facts: People say that their feelings are affected by the upcoming presidential race. Most people think Vice President Kamala Harris will win, but two-thirds of Republicans think former President Donald Trump will win again.
In general, the economy is growing faster than usual, but there are many weak spots, such as the industrial and housing sectors. It’s also been very hard to hire people, and the jobless rate has gone up.
The Fed did lower interest rates last week, though, and that will likely make it much cheaper to borrow money over the next year. When interest rates go down, the economy usually gets a big boost.
