American consumers grew slightly more pessimistic in October as stubbornly high prices continued to erode household finances, according to the latest University of Michigan Surveys of Consumers.
The Consumer Sentiment Index fell to 53.6, down from 55.1 in September and marking a five-month low. The reading is also well below last October’s 70.5, signalling a broad decline in consumer confidence over the past year.
The index of current conditions dropped to 58.6, its lowest point since August 2022, while the expectations index fell to 50.3, compared to 51.7 in September and 74.1 a year ago.
“Overall, consumers see few material changes in economic circumstances from last month as inflation and high prices remain at the forefront of consumers’ minds,” said Joanne Hsu, director of the surveys, in a statement.
Roughly 45% of respondents said high prices have weakened their personal finances — the highest share since August 2024.
Many also cited elevated prices and tariffs as key reasons for worsening buying conditions for large household goods. Vehicle purchasing conditions remain more than 20% below last year’s levels, with 39% of consumers blaming high prices.
While the Federal Reserve’s recent interest rate cut has slightly improved consumer views on major purchases, concerns about borrowing costs remain high compared to pre-2022 levels.
According to the survey, 42% of consumers expect interest rates to fall over the next year, down from 47% in September and 52% a year ago.
Around 31% expect rates to remain steady, while just under a quarter foresee further increases.
The University of Michigan’s Surveys of Consumers, conducted monthly via a nationally representative online panel, capture how Americans perceive their financial situation, inflation, and broader economic outlook, key indicators for forecasting spending and policy trends.
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