Preliminary October UMich Sentiment held steady this month, registering a tiny 0.1pt decline below September (Current Condiutions dipped but Expectations ticked up)...
Increases in sentiment among Republicans and Democrats were balanced by declines among independents.
While year-ahead business conditions improved about 14%, they stand 16% less than last October’s read.
This month’s decline in the Current Conditions subindex was driven entirely by buying conditions for durables, which plunged 18% on the basis of higher interest rates and rising concerns about the affordability of such purchases.
Inflation expectations over both time horizons increased for the second straight month to their highest readings since May.
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Long-run inflation expectations also stepped up from 3.4% in September to 3.5%, notably higher than their 2024 range of 2.8% to 3.2%.
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Year-ahead inflation expectations ticked up from 4.6% last month to 4.7% this month.
Frustration over high prices eroding consumers’ living standards continues to mount.
For the fourth straight month, an increasing share of consumers spontaneously mentioned that high prices are dragging down their personal finances, at 56% this month, compared with 45% in January of this year. As seen in the chart below, these increases are
