US Consumer Sentiment Hits Five-Month Low in October
University of Michigan data shows US consumer sentiment fell to 48.0 in October as inflation expectations and interest rate concerns grew.
U.S. consumer sentiment fell for the third consecutive month in October 2026, reaching a five-month low of 48.0. While the figure was slightly lower than the previous month's 48.1, it remained higher than the 46.3 reading economists had forecasted.
Joanne Hsu, director of the University of Michigan Surveys of Consumers, attributed the decline largely to an 18% plunge in buying conditions for durable goods. This drop was driven by affordability concerns and higher interest rates, with 69% of consumers expecting rates to rise over the next year—the highest level of anticipation since April 2023.
Inflation expectations also climbed, with year-ahead expectations reaching 4.7% and long-run expectations hitting 3.5%, both the highest levels since May. Hsu noted that after five years of above-target inflation, these rising expectations expose risks that elevated inflation could become entrenched.
Economic sentiment diverged by political affiliation, falling among independents for the third straight month while rising among Republicans and Democrats. The Current Economic Conditions Index dropped to 46.7, though the Index of Consumer Expectations saw a slight increase to 48.8.
