In early September, US consumer sentiment hit its lowest point in a year and producer prices were unchanged in August. It pointed to moderate economic growth and tame inflation that could affect the Federal Reserve's decision whether interest rates should be hiked next week.

On Friday, the fall in consumer sentiment and weak inflation were reported. And these are opposite to a tightening labor market. Sentiment was probably destabilized as a result of recent stock market volatility in the middle of concerns over slowing economy of China.

According to Millan Mulraine, deputy chief economist at TD Securities in New York, "The sharp deterioration in consumer confidence and the re-emergence of the disinflationary thrust in goods prices will factor prominently in the Fed's deliberations next week, and both are likely to add to the case for caution as they consider raising rates". As per the University of Michigan, its consumer sentiment index dropped to 85.7 early this month, the lowest since September last year, from a reading of 91.9 in August.

Estimate of the survey about consumer expectations also fell to a one-year low, as households expected sluggish growth overseas to affect the US economy. Expectations of the consumers for current and future personal finances were also badly affected.

Only slight declines in sentiment were there towards motor vehicle and home purchases, even when households disapproved of the economy's outlook. Jesse Hurwitz, an economist at Barclays in New York said that now, they are looking forward to the final September survey results.