A new Thomson Reuters/University of Michigan survey found consumer sentiment is on the decline, dropping to a five-month low. The survey reported consumer sentiment fell to 76.8 in September, the lowest rating since April and a significant drop from August’s 82.1. The low rating came as a surprise, as economists had predicted a more stable reading of 82.0 for the month.
The slowdown in the housing market has contributed to the fall in sentiment, as individuals feel less secure with their personal finances. Mortgage rates have increased rapidly over the past several months, making it more difficult to enter the housing market or sell current homes.
Richard Curtin, director of the survey, attributed the decline to “growing concerns that higher interest rates will diminish the pace of economic growth as well as job gains.”
The Federal Reserve is preparing to slow down the bond-buying program that is currently in place to help the economy recover. In response to the Fed action, consumers have become increasingly worried over the future of the U.S. economy.
These concerns are made apparent by the survey’s findings on consumer expectations. In August, the survey reported consumer expectations ranked at 73.7 – in September this fell to 67.2, an eight-month low.
Drops in consumer sentiment and economic expectations are often bad for small business owners, who rely on customers to bring in steady business. When consumers feel uncertain about their economic futures, they often refrain from spending, making it tough for entrepreneurs to succeed. If a small business owner is having trouble making ends meet, they can come to National Funding for assistance. National Funding can help an entrepreneur with getting a small business loan to improve company operations and can offer other financial services to make sure a business owner can keep shop doors open.