The Michigan Consumer Sentiment Index inched down 0.1 points (-0.2 percent) to 55.0 this month. The latest reading was higher than the forecast of 54.1. Consumer sentiment has fallen by 22.0 percent (15.5 points) when compared to a year ago amid concerns about unemployment and inflation.
The Current Economic Conditions Index rose 1 percent in the reported period compared to September and fell 6 percent compared to October 2024, resulting in a 61-point reading.
The Index of Consumer Expectations declined 1 percent on a monthly basis, but nosedived 30.9 percent on a yearly basis, coming in at 51.2.
The Director of Consumer Surveys, Joanne Hsu, said, “Consumer sentiment moved sideways this month. At 55 index points, sentiment is virtually unchanged from September. Improvements this month in current personal finances and year-ahead business conditions were offset by declines in expectations for future personal finances as well as current buying conditions for durables.
“Overall, consumers perceive very few changes in the outlook for the economy from last month. Pocketbook issues like high prices and weakening job prospects remain at the forefront of consumers’ minds,” continued Hsu. At this time, consumers do not expect meaningful improvement in these factors. Meanwhile, interviews reveal little evidence that the ongoing federal government shutdown has moved consumers’ views of the economy thus far.
“Year-ahead inflation expectations ebbed from 4.7 percent last month to a still-high 4.6 percent this month. Long-run inflation expectations held steady at 3.7 percent. Inflation expectations for both time horizons are about midway between the readings seen a year ago and the highs seen this year in April and May in the wake of the initial announcements of major tariff changes,” Hsu said.
