Americans are feeling better about the economy, but inflation concerns remain prominent

Consumer sentiment rose in September to its highest level since April, according to the latest University of Michigan survey. Early data released on Friday showed the consumer sentiment index rose to 59.5 in September from 58.2 in August.

Despite the gains, sentiment remains historically low and the University of Michigan poll remains comparable to levels found at the depths of the Great Recession.

Although the September survey showed that respondents do not expect high prices to disappear soon, consumers said they expect inflation to reach 4.6% in the next 12 months and 2.8% over the next five years; therefore the lowest levels on record. away this year.

“It is unclear whether these improvements will last, as consumers continue to show considerable uncertainty about the future path of prices,” Joanne Hsu, director of Consumer Research, said in the report. “Uncertainty about short-term inflation reached a level last seen in 1982, and uncertainty about long-term inflation rose to 4.5 from 3.9 this month, well above the 3.4 level seen last September.”

Inflation reached 8.3% in the 12 months ending in August, according to the Bureau of Labor Statistics’ latest Consumer Price Index report. Although it’s down from recent months, decades of inflation have crept into every corner of Americans’ lives and eaten away at earned wages. This has prompted the Federal Reserve to initiate a series of record rate hikes to slow the economy and lower inflation.

Fed officials have been concerned that inflation is entrenched in the United States, and consumer expectations factor into that equation. Expectations can be a self-fulfilling prophecy: if consumers anticipate that prices will remain high, they are likely to spend more and demand higher wages, so firms may raise prices to accommodate higher demand and wages. If expectations are lower, they may hold back on spending and ask for smaller pay increases.

Friday’s consumer sentiment report is the last major economic data before the Federal Reserve meets next week to discuss monetary policy and determine whether it will raise rates again in a battle to tame inflation.