American consumers are feeling gloomier. The University of Michigan’s final consumer sentiment index for September 2026 came in at 48.1, down from 51.7 in August. A year ago, it stood at 55.1.

The index measures how households feel about the economy. Readings below 50 signal broad pessimism. The expectations gauge fell to 46.3, while the current conditions gauge stood at 50.9.

The university pointed to trade tensions, high prices and elevated interest rates. Year-ahead inflation expectations climbed to 4.6 per cent, which can make households more cautious about spending.

Why does it matter? Consumer spending drives most of the US economy. When sentiment falls this low, economists watch for slower shopping, delayed big purchases and pressure on growth in the months ahead.

The survey has been running since the 1940s and is closely watched by the US Federal Reserve and investors. A sustained drop in sentiment has in the past come before slowdowns in household spending.