Consumer confidence dips but remains high

Consumer confidence dipped this month but remained high, as households are expecting inflation to pickup in the next year -- signs of a solid economy.

The University of Michigan said Friday its final reading of consumer sentiment fell 1.8% from a month earlier to a reading of 95.1 in September, in part due to the hurricanes that tore into Texas and Florida this summer. Still, sentiment is up 4.3% over the past year, a high level compared to trends over the past 17 years.

Americans' assessment of current economic conditions rose 0.7% over the month to 111.7, and has risen by more than 7% over the past year. Their expectations for future economic conditions fell 3.8% over the month but has risen 2.1% over the year.

The survey's chief economist pointed to a "long list of issues" that threatened to lower confidence, including the North Korea conflict, the hurricanes, and the deadly racial protests in Charlottesville, Va. "Confidence has nonetheless remained very favorable, moving sideward in a very narrow positive range," he said.

Consumers said they expected inflation of 2.7% in the next year. Throughout the spring and summer they had expected inflation of 2.5% and 2.6%, respectively. Higher inflation expectations could give reassurance to the Federal Reserve that consumer prices are poised to pick up and meet the Fed's annual 2% target.

By Josh Mitchell