Consumer sentiment plunged in September amid heightened inflation fears, reaching its second-lowest level on record in the University of Michigan's monthly survey released Friday.
The survey's headline index fell to 47.8, down 7.5% from August and 13.2% lower than a year earlier.
It was the second-lowest reading in data dating back to 1952, with the record low reached in May as rising prices also weighed on the outlook.
Markets were expecting a reading of 51.
“Year-ahead expectations for both personal finances and business conditions plunged,” Joanne Hsu, survey director, said.
“With a resurgence in fuel prices and trade tensions, consumers anticipate greater pressures on their pocketbooks to come.”
The one-year inflation outlook surged to 4.6%, up 0.6 percentage point from the previous reading and the highest level since reaching the same level in June.
The current conditions index fell 1.9% from the previous month, while the expectations measure tumbled 11.1%.
Traders now see a Federal Reserve rate hike next week as a near certainty, with odds rising to 86.2% following the Bureau of Labor Statistics' release of its consumer price index (CPI), showing annual inflation at 3.4%, well above the central bank's 2% target.
