Overview
- The University of Michigan's final October reading, released Friday, put the Consumer Sentiment Index at 48.0, the second-lowest reading on record and down from 48.1 in September.
- One-year inflation expectations ticked up to 4.7% and five-year expectations rose to 3.5%, signaling that households expect prices to stay elevated in the near term.
- The drop in October sentiment was concentrated among self-identified independents, whose score fell to 42.4 while Democrats and Republicans showed small improvements.
- Global oil topped about $116 a barrel and the U.S. average gasoline price was near $4.29 per gallon, pressures that survey director Joanne Hsu said are cutting consumer purchasing power.
- Persistently weak sentiment matters because consumer spending makes up roughly two-thirds of U.S. GDP, so sustained price worries could slow growth, lift Treasury yields, and shape voter concerns ahead of the midterm elections.