American consumers remained downbeat about the economy in October, with concern about expensive major purchases offsetting some improvement in expectations for the year ahead, according to the University of Michigan’s final monthly survey.
The consumer sentiment index registered 48.0, barely below September’s 48.1 and down from 53.6 a year earlier. The figures were released October 23, providing the survey’s final monthly reading before the November midterm elections.
The headline’s small monthly change concealed a sharper split underneath. The current-conditions index fell to 46.7 from 50.9, while the expectations index rose to 48.8 from 46.3, meaning respondents’ assessment of the present weakened even as their outlook improved.
Survey director Joanne Hsu attributed the current-conditions decline to worsening views about buying durable goods. Higher interest rates and concerns about affordability drove an 18% drop in that purchasing measure, according to the university’s release.
Expectations about prices moved higher as well. Respondents anticipated 4.7% inflation over the coming year, up from 4.6% in September; their longer-run expectation rose to 3.5% from 3.4%. These are consumers’ expectations, rather than measurements of actual future price increases.
A separate University of Michigan analysis released the same day examined whether elevated inflation expectations are becoming entrenched. It traced renewed concern to successive supply shocks, including tariff changes and the Iran conflict, while comparing recent survey results with earlier periods.
The researchers warned that persistent expectations of higher prices can alter behavior, including encouraging consumers to buy sooner to avoid future increases. They described that as a risk, not an inevitable outcome, and emphasized evidence from interviews and the historical record.
The distinction matters when interpreting a confidence survey: it measures how households view economic conditions, rather than directly measuring growth or spending. The university’s next scheduled release, preliminary November results, is set for November 6 at 10 a.m. Eastern.