Consumer sentiment in the United States fell to a five-month low in October as worries about inflation and the overall economy grew, according to the University of Michigan's latest survey released from Ann Arbor, Michigan. The early October reading of the University's Index of Consumer Sentiment dropped to 53.6, down from 55.1 in September and well below the 70.5 mark seen in October 2024—a 24 percent decline over the past year.

The survey revealed that lower income consumers felt the biggest impact, with a significant drop in their confidence compared to those with higher incomes. According to the University of Michigan's report, the Current Economic Conditions Index also fell by three percent since September, while the Index of Consumer Expectations dipped 2.7 percent in the same period. Year-over-year, those indices are down nearly ten percent and over thirty percent, respectively. The report's director, Joanne Hsu, said, "Inflation and high prices remain at the forefront of consumers’ minds," and noted only about two percent of survey respondents mentioned the federal government shutdown as affecting the economy.

Short- and long-term inflation expectations also rose to their highest levels since May, with year-ahead inflation expectations at 4.6 percent, and long-run inflation expectations increasing to 3.9 percent, as detailed in the University of Michigan's summary and corroborated by reporting from SGB Media. Hsu explained, "This month's increase in long-run inflation expectations was driven primarily by independents and Republicans," and described that inflation uncertainty increased for both short- and long-term forecasts.

As reported by the Washington Examiner, this recent sentiment reading is among the lowest on record, only surpassed by one month during the peak of the recent inflation wave. The drop in sentiment comes as the labor market shows signs of weakening and consumers remain frustrated by persistent high prices and stagnant incomes. The U.S. unemployment rate has risen slightly to 4.4 percent, and recent jobs data was delayed due to the lengthy government shutdown.

Looking ahead, consumer sentiment is likely to remain sensitive to changes in inflation, labor market conditions, and economic policy. The survey will continue to track these trends in the coming months.

For more details, see the University of Michigan's official results here, review the survey data here, and read further analysis here.

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