Consumer sentiment dropped 6% in October, according to data from the University of Michigan.
“Consumer sentiment confirmed its early-month reading, falling back about 6% this October following two consecutive months of very little change. This decline was driven in large part by higher-income consumers and those with sizable stock holdings, consistent with recent weakness in equity markets,” said Joanne Hsu, director of the Surveys of Consumers.
October’s consumer sentiment reading came in at 63.8, a large drop from September’s reading of 67.9, but still 6.5% higher year-over-year.
Inflation expectations for the future, meaning the year ahead, grew from 3.2% last month to 4.2%, the highest reading since May 2023. Long-run inflation expectations improved slightly, from 2.8% last month to 3%. Long-run inflation expectations remained elevated relative to the 2.2% – 2.6% range seen in the two years pre-pandemic.
“Across all consumers, one-year expected business conditions plunged 16% and expectations over consumers’ own personal finances in the year ahead fell 8%, reflecting ongoing concerns about inflation and, to a lesser degree, uncertainty over the implications of negative news both domestically and abroad,” added Hsu.
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