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 46.3 in October, down 3.6% from 48.1 in September. Year-over-year, the index was down 13.6% from 53.6 in October 2025.
• Current Economic Conditions declined to a reading of 44.7 in October, down 12.2% from 50.9 in September and 23.7% from 58.6 a year earlier.
• The Index of Consumer Expectations rose to 47.3 in October, up 2.2% from 46.3 in September but down 6.0% from 50.3 a year earlier.

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

“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 2.8–3.2%. Inflation expectations over both time horizons increased for the second straight month to their highest readings since May.”