US Consumer Sentiment Weakens in October: Survey
Consumer Sentiment Drops Amid Inflation Concerns
U.S. consumer sentiment experienced a sharp decline in October, according to a survey released on Friday. The survey, conducted by the University of Michigan, revealed that households are anticipating higher inflation over the next year, which has negatively impacted consumer confidence.
Index Shows Significant Decrease in Sentiment
The preliminary reading of the overall index of consumer sentiment for October was 63.0, compared to 68.1 in September. This decline was greater than expected, as economists had forecasted a reading of 67.2. The director of the University of Michigan’s Surveys of Consumers, Joanne Hsu, attributed the setback in sentiment to the burden of high prices, impacting almost all demographic groups.
Inflation Expectations Rise
In addition to the decrease in consumer sentiment, the survey also indicated an increase in inflation expectations. One-year inflation expectations rose to 3.8% in October, up from 3.2% in September. The five-year inflation outlook also saw a slight increase, rising to 3.0% from 2.8% in the previous month. These figures have remained within a narrow range for the majority of the past 27 months, ranging from 2.9% to 3.1%.
In conclusion, the survey highlights a decline in consumer sentiment due to concerns over rising inflation. These findings suggest that households are anticipating higher prices in the near future, impacting their overall confidence in the economy.
