University of Michigan Preliminary Consumer Sentiment Index Increases for October 2022

The University of Michigan today (10-14-22) released its Preliminary Consumer Sentiment Index (CSI) for October.

The Index of Consumer Sentiment increased to a reading of 59.8 in October, up from its reading of 58.6 in September. This is a month-over-month increase of 2.0% but down 16.6% year-over-year (71.7 in October 2021).

The Current Economic Conditions increased to a reading of 65.3 in October, up from its reading of 59.7 in September. This is a month-over-month increase of 9.4% but down 16.0% year-over-year (77.7 in October 2021).

Finally, the Index of Consumer Expectations declined to a reading of 56.2 in October, down from its 58.0 reading in September. This is a month-over-month decrease of 3.1% and down 17.2% year-over-year (67.9 in October 2021).

In remarks and analysis prepared to accompany the release of the Consumer Sentiment Index, Dr. Joanne Hsu, Director of Surveys for the University of Michigan, said:

“Consumer sentiment is essentially unchanged at 1.2 index points above September, in spite of a 23% improvement in current buying conditions for durables owing to an easing in supply constraints. Sentiment is now 9.8 points above the all-time low reached in June, but this improvement remains tentative, as the expectations index declined by 3% from last month. Continued uncertainty over the future trajectory of prices, economies, and financial markets around the world indicate a bumpy road ahead for consumers.

The median expected year-ahead inflation rate rose to 5.1%, with increases reported across age, income, and education. Last month, long-run inflation expectations fell below the narrow 2.9-3.1% range for the first time since July 2021, but since then expectations have returned to that range at 2.9%. After 3 months of expecting minimal increases in gas prices in the year ahead, both short and longer run expectations rebounded in October.”