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

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

• The Index of Consumer Sentiment fell to a reading of 55.0 in October, down 0.2% from 55.1 in September and 22.0% lower than a year ago (70.5 in October 2024).
• Current Economic Conditions rose to 61.0, up 1.0% from 60.4 in September but 6.0% lower than a year ago (64.9 in October 2024).
• The Index of Consumer Expectations declined to 51.2, down 1.0% from 51.7 in September and 30.9% lower than a year ago (74.1 in October 2024).

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

“Consumer sentiment moved sideways this month. At 55 index points, sentiment is virtually unchanged from September. Improvements this month in current personal finances and year-ahead business conditions were offset by declines in expectations for future personal finances as well as current buying conditions for durables. Overall, consumers perceive very few changes in the outlook for the economy from last month. Pocketbook issues like high prices and weakening job prospects remain at the forefront of consumers’ minds. At this time, consumers do not expect meaningful improvement in these factors. Meanwhile, interviews reveal little evidence that the ongoing federal government shutdown has moved consumers’ views of the economy thus far.

Year-ahead inflation expectations ebbed from 4.7% last month to a still-high 4.6% this month. Long-run inflation expectations held steady at 3.7%. Inflation expectations for both time horizons are about midway between the readings seen a year ago and the highs seen this year in April and May in the wake of the initial announcements of major tariff changes.”