Consumer sentiment was essentially unchanged in October, according to October's University of Michigan Surveys of Consumers. .While consumers reported modest improvements in current personal finances and year-ahead business conditions, those gains were offset by weaker expectations for future finances and a decline in buying conditions for durable goods, according to the report.The index of consumer sentiment dropped 0.2 percent this month to 55.0 from 55.1 in September, but was 22 percent lower than its year-earlier mark. The index tracking current economic conditions improved 1 percent to 61.0 from 60.4 in September. October’s reading was 6 percent under 64.9 in October 2024. The index measuring consumer expectations fell 1 percent to 51.2 from 51.7 in September, and was 31 percent under the year-ago mark of 74.1. Inflation expectations eased slightly, with the year-ahead outlook dipping to 4.6 percent from 4.7 percent in September. Long-term inflation expectations were steady at 3.7 percent. “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,” said Director Joanne Hsu. According to the report, the ongoing government shutdown has not significantly impacted their economic views. The Conference Board’s Consumer Confidence Index dropped 3.6 points in September to a five-month low of 94.2 from 97.8 in August. The index tracking consumers’ assessments of current business and labor market conditions fell 7 points to 125.4, its largest drop in a year. The index reflecting consumer short-term outlooks for income, business and employment dropped 1.3 points to 73.4.“Consumers’ assessment of business conditions was much less positive, and their appraisal of current job availability fell for the ninth straight month to a multiyear low, consistent with declining job openings,” said Stephanie Guichard, senior economist at The Conference Board.
