The University of Michigan Surveys of Consumers’ final reading for October showed U.S. consumer sentiment weakening to 48, a decline of 0.2% from September and 10.4% below the level a year earlier, the survey released on Friday found. The October result is the third consecutive monthly drop in the index.
Current conditions and expectations
The Current Economic Conditions Index, which measures consumers’ views of present economic conditions, fell to 46.7 from 50.9 in September and was well below last October’s 58.6. The Index of Consumer Expectations, which tracks consumers’ outlook over the year ahead, inched up to 48.8 from 46.3 in September but remained under last October’s 50.3.
| Measure | October 2026 | September 2026 |
|---|---|---|
| Index of Consumer Sentiment | 48 | 48.1 |
| Current Economic Conditions | 46.7 | 50.9 |
| Index of Consumer Expectations | 48.8 | 46.3 |
Inflation expectations and household pressure
Consumers’ inflation expectations rose in October. The survey recorded year‑ahead inflation expectations at 4.7%, up from 4.6% in September. Long‑run inflation expectations increased to 3.5% from 3.4% the prior month. The report noted these were the highest readings for both horizons since May.
The share of consumers saying that high prices are reducing their living standards continued to grow. In October, 56% of respondents reported that high prices were dragging down their personal finances, up from 45% in January.
- The October index is 15% lower than in February 2026, the survey said — a reference point it identified as just before the Iran conflict.
- Current conditions weakened more than expectations, suggesting households feel immediate pressure from prices and the economy.
Economists and policymakers watch the University of Michigan survey because its measures of sentiment and inflation expectations can influence consumer spending, wage demands and monetary policy considerations. The October results show persistent concern about prices among U.S. households even as short‑term expectations showed a modest uptick.
