Consumer sentiment fell 5.1 points in October to 63.0 following two consecutive months of very little change but is still 3.1 points higher than a year ago. The Current Economic Conditions Index decreased 4.7 points from the previous month to 66.7 but is 1.1 points above the October 2022 index. The Consumer Expectations Index decreased 5.3 points to 60.7 from the last month and is 4.5 points higher than a year ago.
“Consumer sentiment fell back about 7% this October following two consecutive months of very little change. Assessments of personal finances declined about 15%, primarily on a substantial increase in concerns over inflation, and one-year expected business conditions plunged about 19%. However, long-run expected business conditions are little changed, suggesting that consumers believe the current worsening in economic conditions will not persist. Nearly all demographic groups posted setbacks in sentiment, reflecting the continued weight of high prices.”
“Year-ahead inflation expectations rose from 3.2% last month to 3.8% this month. The current reading is the highest since May 2023 and remains well above the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations edged up from 2.8% last month to 3.0% this month, again staying within the narrow 2.9-3.1% range for 25 of the last 27 months. Long-run inflation expectations remain elevated relative to the 2.2-2.6% range seen in the two years pre-pandemic,” said University of Michigan Surveys of Consumers Director Joanne Hsu.
Read the University of Michigan Surveys of Consumers release.