US consumer sentiment weakened at the start of October, according to the University of Michigan’s survey released Friday. The preliminary consumer sentiment index fell to 46.3, its lowest reading since May and below economists’ median forecast of 47.6. The gauge of current conditions dropped from 50.9 in the previous month to 44.7, marking a record low, while the expectations index rose from 46.3 to 47.3, its first increase since July. Inflation expectations also moved slightly higher. Consumers said they expect prices to rise 4.7% over the next year, up from 4.6% a month earlier. For the next five to 10 years, they projected annual inflation of 3.5%, also above the September reading. Joanne Hsu, who oversees the survey, said confidence fell sharply among lower-income consumers and among those with smaller stock portfolios. She added that gains in sentiment among Democratic and Republican supporters were offset by a decline among independents, and said consumers across political groups viewed the economic outlook as weaker than it was before the Iran conflict erupted earlier this year.
US consumer sentiment declined at the start of October, with inflation continuing to pressure households, according to the University of Michigan’s survey released Friday. The preliminary consumer sentiment index fell to 46.3, the lowest level since May and below economists’ median forecast of 47.6.
Current conditions gauge hits a record low
The survey showed that the current conditions index, which tracks views on present economic conditions, dropped from 50.9 in the previous month to 44.7, setting a record low. At the same time, the expectations index rose from 46.3 to 47.3, its first increase since July.
Inflation expectations moved slightly higher
Consumers said they expect prices to rise 4.7% over the next year, slightly above the prior month’s 4.6%. Over the next five to 10 years, they expect prices to increase at an annual rate of 3.5%, also a bit higher than the September reading.
Confidence weakened among lower-income households
Joanne Hsu, who oversees the survey, said in a statement that confidence fell sharply this month among lower-income consumers and among consumers with smaller stock portfolios. Rising confidence among Democratic and Republican supporters was offset by a decline among independents.
Hsu said, “Despite their different political views, consumers across partisan groups agreed that the economic outlook has weakened compared with the period before the Iran conflict broke out earlier this year.”
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