University of Michigan Releases Final Results of Its Consumer Sentiment Index for October

On Friday, the University of Michigan released the final results of its Surveys of Consumers for October.

• The Index of Consumer Sentiment fell to 53.6 in October, down 2.7% from 55.1 in September and 24.0% from 70.5 a year ago.
• Current Economic Conditions fell to a reading of 58.6 in October, down 3.0% from 60.4 in September and 9.7% from 64.9 in October 2024.
• The Index of Consumer Expectations fell to 50.3 in October, down 2.7% from 51.7 in September and 32.1% from 74.1 in October 2024.

In remarks accompanying the release, Surveys of Consumers Director Joanne Hsu said:

“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.”