Consumer sentiment decreased 1.5 points month-over-month in October to 53.6, down 16.9 points from one year ago, according to final results of the University of Michigan Surveys of Consumers. The Current Economic Conditions Index decreased 1.8 points from the previous month to 58.6 and down 6.3 points from the previous year. The Consumer Expectations Index decreased by 1.4 points to 50.3, 23.8 points lower than the September 2024 Index.
Consumer sentiment was little changed this month, slipping a scant 1.5 index points from September. A modest increase in sentiment among younger consumers was offset by decreases among middle-age and older consumers. Current personal finances inched up, while expected personal finances receded. Overall, consumers perceive few material changes in economic circumstances from last month; inflation and high prices remain at the forefront of consumers’ minds. There was little evidence this month that consumers connect the federal government shutdown to the economy. Only about 2% spontaneously referenced the shutdown during this month’s interviews, compared with the 10% of consumers who did so in January 2019 during that 35-day shutdown.
Year-ahead inflation expectations ebbed from 4.7% last month to 4.6% this month. These expectations are currently midway between the readings seen a year ago and the highs seen this year in May in the wake of the initial announcements of major tariff changes. Long-run inflation expectations increased from 3.7% last month to 3.9% this month but remains below this year’s high point seen in April. This month’s increase in long-run inflation expectations was driven primarily by independents and Republicans. Inflation uncertainty—as measured by the interquartile range of expectations—ticked up for both time horizons this month.
Read the University of Michigan Surveys of Consumers release.
