The final October print for UMich Consumer Sentiment data slipped a smidge from the preliminary print, to its weakest since May as a modest increase in sentiment among younger consumers was offset by decreases among middle-age and older consumers.
Source: Bloomberg
Overall, consumers perceive few material changes in economic circumstances from last month; inflation and high prices remain at the forefront of consumers’ minds with the spread between Democrats’ and Republicans’ confidence at a record high…
Source: Bloomberg
Year-ahead inflation expectations ebbed from 4.7% last month to 4.6% this month. These expectations are currently midway between the readings seen a year ago and the highs seen this year in May in the wake of the initial announcements of major tariff changes. Long-run inflation expectations increased from 3.7% last month to 3.9% this month but remains below this year’s high point seen in April.
Source: Bloomberg
Notably the rise in longer-term inflation expectations was driven by Independents…
Consumers remain frustrated by the persistence of high prices, spontaneously mentioning high prices at various points throughout the interviews.
About 45% of consumers referenced that their personal finances were eroded by high prices, the highest reading since August 2024.
Labor market expectations were stable this month, albeit at generally unfavorable levels.
About 64% of consumers expect unemployment to increase in the year ahead, just shy of this year’s high of 66% seen in March. For the eleventh consecutive month, more than 60% of consumers expect any income gains over the next year to be outstripped by inflation.
The expected probability of job loss waned slightly but remained elevated
Finally, there was little evidence this month that consumers connect the federal government shutdown to the economy. Only about 2% spontaneously referenced the shutdown during this month’s interviews, compared with the 10% of consumers who did so in January 2019 during that 35-day shutdown.
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