Consumer Sentiment Final Reading of 48.0 Stays Near a Record Low
American consumers remained close to their gloomiest on record heading into the midterm elections, even as the final October reading came in better than first reported.
The University of Michigan’s Surveys of Consumers said on Friday that its Consumer Sentiment Index finished October at 48.0. The figure was revised up from a preliminary reading of 46.3 and beat the 46.3 forecast of economists polled by Reuters, but it edged 0.1 point below September’s final reading of 48.1.
The October reading was the second-lowest in the survey’s history. The record low of 44.8 was set in May, not long after the Iran war began.
“Consumer sentiment held steady this month, registering a scant one-tenth of an index point below September,” said Joanne Hsu, the director of the Surveys of Consumers. Increases in sentiment among Republicans and Democrats were balanced by declines among independents, she said.
The details showed where the strain sits. The decline in the survey’s current conditions measure was driven entirely by buying conditions for durable goods, which plunged 18% on the basis of higher interest rates and rising concerns about affordability.
“Purchasing power continues to dominate consumer views of the economy,” Hsu said. “Sentiment is now 10% below a year ago and 15% less than February, just prior to the Iran conflict.”
Inflation expectations rose again. Consumers expected prices to climb 4.7% over the year ahead, up from 4.6% in September, and the expectation for inflation over the next five years rose to 3.5% from 3.4%. The year-ahead figure has surged from 3.4% in February, before the United States and Israel attacked Iran.
The survey arrived less than two weeks before the Nov. 3 midterm elections. Reuters reported that the cost of living has become the central issue of the campaign, and that President Donald Trump’s approval rating has fallen to a record low amid surging fuel prices.
Gold prices held near the $4,000 level after the data was released. Spot gold traded at $4,014.71 an ounce, up slightly on the day, according to Kitco.