The University of Michigan’s preliminary consumer sentiment index for October indicates a slight decline, dropping 0.1% from 55.1 in September to 55.0, marking the third consecutive monthly dip and reaching the lowest level in five months. Despite the minimal change, the trend reflects growing unease among American households regarding inflation and employment prospects.
Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, noted that while expectations of rising unemployment softened slightly—to 48% in October from 53% in September—this still signals a pessimistic outlook compared to earlier in the year and aligns historically with upcoming increases in joblessness. Joanne Hsu, director of the Surveys of Consumers at the University of Michigan, stated that consumers do not foresee substantial improvements in inflation or labor market conditions in the near term.
With federal data releases stalled due to the ongoing government shutdown, the Michigan index serves as a critical barometer of economic sentiment. The Labor Department’s September jobs report, originally scheduled for October 3, remains unpublished as agency operations are suspended.
However, some indicators suggest underlying economic resilience. A recent Bank of America report found that household spending via credit and debit cards increased by 2% year-over-year in September, up from 1.7% in August. Alexandra Brown, North America economist at Capital Economics, expects consumer spending to remain robust in the final quarter of 2025, providing a buffer against broader economic headwinds.
— news from CBS News
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Consumer confidence remains fragile, latest University of Michigan index shows
Consumer sentiment around the U.S. dipped in October, sinking to a five-month low as Americans fret over a stalling job market and stubbornly high inflation, new private economic data shows. n nThe University of Michigan ‘s preliminary October sentiment index, released Friday, shows consumer sentiment fell 0.1% on a monthly basis, from 55.1 points in September to 55. While the drop was nominal, it represents the third consecutive month the confidence measure, which is closely watched by investors, has declined. n n”The net percentage of households expecting the unemployment rate to rise over the next year dipped to 48% in October, down from the recent high of 53% in September, but still a far bleaker picture than at the start of the year and historically consistent with a sharp rise in joblessness in the months ahead,” Oliver Allen, senior U.S. economist with Pantheon Macroeconomics, said in a report. n nAmericans remain concerned about high prices, with expectations for inflation over the next year still hovering at elevated levels. Weakening job prospects also remain top of mind for Americans, Joanne Hsu, director of the Surveys of Consumers at U. of Michigan, said in a statement. n n”At this time, consumers do not expect meaningful improvement in these factors,” she said. n nThe latest University of Michigan reading provides a sliver of insight into the economy at a time when other benchmarks are unavailable due to a data blackout tied to the ongoing government shutdown. n nThe Department of Labor was scheduled to release monthly September jobs numbers on Oct. 3, but that report remains on hold after the agency said it would suspend operations. n nWhile the University of Michigan index shows consumer sentiment was virtually unchanged from September, other data points to ongoing concerns about the economy. The percentage of people saying the economy is getting worse ticked up to 59% in October compared to 54% in July, according to a recent CBS News poll. n nDespite such concerns, other signals show the economy holding up. A Bank of America report released Friday shows credit and debit card spending per household rose 2% in September from a year ago, up from 1.7% in August. n nAlexandra Brown, North America economist at Capital Economics, said in a research note that consumer spending growth is likely to remain healthy in the final three months of 2025.