Consumer sentiment fell this month, down 7% following two consecutive months of little change, according to the latest report from the University of Michigan, which tracks the data through its monthly Surveys of Consumer.
October’s consumer sentiment reading came in at 63.0, lower than September’s reading of 68.1, but still 5.2% higher year-over-year.
Consumers’ inflation expectations for the year ahead rose from 3.2% last month to 3.8% this month, the highest since May 2023 and remains well above the 2.3-3.0% range seen in the two years prior to the pandemic, the report noted.
“Assessments of personal finances declined about 15%, primarily on a substantial increase in concerns over inflation, and one-year expected business conditions plunged about 19%,” said University of Michigan’s Surveys of Consumers Director Joanne Hsu.
“However, long-run expected business conditions are little changed, suggesting that consumers believe the current worsening in economic conditions will not persist. Nearly all demographic groups posted setbacks in sentiment, reflecting the continued weight of high prices,” Hsu concluded.
Tracking in similar fashion, RISMedia’s Broker Confidence Index (BCI) fell to its lowest reading this year at 5.8 in September. RISMedia Senior Editor Jesse Williams, author of the BCI, noted, “Brokers across the country are seeing their confidence wane, as what many hoped would be a temporary spike in mortgage rates has dragged on through most of the year.”
He added, “As autumn arrives and school has resumed, it is difficult to parse out how much a slowing of activity can be attributed to regular seasonal factors, and how much is related to the higher rate environment and/or a long-simmering inventory crisis that has exacerbated affordability issues.
“Brokers offered different assessments, with some saying that real estate has proved more resilient than expected given the circumstances, while others viewed these macro barriers as a problem that needs addressing before housing can open up again.
You can read RISMedia’s full BCI October report here.
For the full Consumer Sentiment report, click here.
