Consumer Sentiment Faces Another Test as Markets Eye Fed Path
A preliminary Michigan survey is expected to show confidence weakening again, while jobs data and diesel costs shape the week's economic focus.
Key takeaways
- Economists expect Michigan consumer sentiment to slip to 48 from 48.1.
- The Conference Board's confidence index fell to 81.9 in September, its lowest reading since 2014.
- September's 29,000 jobs added fell short of expectations of 90,000.
- G7 countries and partners plan to release 100 million barrels of crude oil and diesel over four months.
Economists expect the University of Michigan's preliminary consumer sentiment reading, due Friday, to fall to 48 from 48.1. The survey will be watched after a separate measure of consumer confidence fell sharply in September.
The Conference Board's index dropped to 81.9 from 88.6, its lowest reading since 2014. The group said consumers' written responses were mostly pessimistic, with more concern about prices and the cost of goods and services.
A split consumer picture
Spending has mostly held up in recent months, supported by stock market gains that have lifted household wealth. But the latest confidence figures point to a growing gap between what consumers are doing and how they feel about the economy.
The Michigan survey's last reading was below levels seen during the 2008 financial crisis. Economists expect sentiment to weaken further in the October preliminary report.
Jobs and the Fed
The US added 29,000 jobs in September, below expectations of 90,000, while unemployment rose to 4.2%. Economists at BNP Paribas said the report showed a labor market losing steam, but described its broad trajectory as positive.
The jobs report reduced pressure for an immediate rate increase. Odds of a 25-basis-point hike at the Fed's October meeting fell to roughly 20%, according to CME data. Economists cited in the article said inflation data, including the next CPI report due Oct. 14, will be a key factor in the Fed's decision.
Diesel and this week's calendar
Diesel prices remain another pressure point. Persian Gulf crude exports have recovered to roughly 98% of pre-war levels, according to JPMorgan Chase, while refined product exports have reached about 58%. US diesel prices averaged $6.41 per gallon on Wednesday, per AAA.
G7 countries and partners announced plans to release 100 million barrels of crude oil and diesel over four months. This week's earnings calendar includes Constellation Brands on Tuesday, Applied Digital on Wednesday and PepsiCo on Thursday.
This article was produced with the help of AI technology. Source: Yahoo Finance
