U.S. consumer sentiment rose to a four-month high in September amid expectations that inflation will continue moderating over the next year and household incomes improve, but views on the labor market weakened against the backdrop of slower job gains.

Just a few months before the U.S. election, consumer sentiment rose to a five-month high as worries about inflation eased. Yet Americans were still “guarded” in their views about the economy.

US consumer sentiment rose to a four-month high in early September, helped by the tamest short-term inflation expectations since the end of 2020 and prospects for lower borrowing costs.