WASHINGTON (MNI) – The initial reading of U.S. consumer sentiment
saw a small improvement in the early part of September after plummeting
last month to levels not seen since May 1980, according to the
Reuters/University of Michigan Consumer Sentiment survey released
Friday.

The index came in at 57.8 — above median expectations of 56.5 —
vs. 55.7 reported for August. The consumer sentiment index was 63.7 in
July and 71.5 in June.

The index’s advance measure of consumers’ view of current
conditions in September came in at 74.5, a decent rebound from the
August’s reading of 68.7. The index was 75.8 in July, and 82.0 in June.

However, the initial gauge of consumers’ expectations declined to
47.0 from 47.4 reported at the end of August, the lowest since May 1980.
This after coming in at 56.0 in July and 64.8 in June.

Consumers’ preliminary 1-year inflation expectations for September
was 3.7%, up from an expectation of 3.5% in August. The expectation was
3.4% in July. Preliminary five-year inflation expectations are at 3.0%
vs. 2.9% the last month two months.

The fact that consumer sentiment remains at low levels is hardly
surprising, as ongoing worries over anemic economic growth in the United
States and the the persistently high level of unemployment cause
Americans to be — as Federal Reserve Chairman Ben Bernanke put it —
“exceptionally cautious.”

And there is the still-unresoved EU debt crisis, where the risk of
a negative feedback loop led by the sovereign debt problems feeding into
the financial system and real economy has policymakers in the U.S. and
elsewhere very concerned.

U.S. Treasury Secretary Timothy Geithner is currently in Europe,
and is urging authorities to present a more unified front and coordinate
actions to tackle the crisis.

And Thursday, a U.S. Treasury official informed reporters that
members of the Financial Stability Oversight Council, created by
Dodd-Frank to monitor systemic risk in the financial system, met via
conference call “to share information and discuss recent developments in
global markets.”

** Market News International Washington Bureau: 202-371-2121 **

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