Consumer sentiment edged down 1.8 points month-over-month in October to 46.3, and is down 7.3 points from one year ago, according to final results of the University of Michigan Surveys of Consumers. The Current Economic Conditions Index decreased 6.2 points from the previous month to 44.7 and down 13.9 points from the previous year. The Consumer Expectations edged up 1 point to 47.3 but are 3 points lower than the October 2025 Index.
Consumer sentiment was little changed this month, inching down a scant 1.8 index points from September. While year-ahead expectations for personal finances and business conditions crept up slightly, buying conditions for durables plummeted amid high prices and borrowing costs. Increases in sentiment among Democrats and Republicans were offset by a decline among independents this month. Overall, sentiment for lower-income consumers and those with smaller stock portfolios dropped steeply this month, groups that have fewer resources to weather increases in prices. Frustration over cost-of-living continues to mount, as consumers across the political spectrum believe that the trajectory of the economy has weakened since the beginning of the year.
Year-ahead inflation expectations ticked up from 4.6% last month to 4.7% this month. The current reading substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 readings. Long-run inflation expectations also stepped up from 3.4% in September to 3.5%, notably higher than their 2024 range of 2.8% to 3.2%. Inflation expectations over both time horizons increased for the second straight month to their highest readings since May.
Read the University of Michigan Surveys of Consumers release.
