Consumer Sentiment Declined 6% to 63.8 in October

Ann Arbor, MI, October 27, 2023-Consumer sentiment declined 6% to 63.8 in October, according to the final results from the University of Michigan Survey of Consumers. 

This represents a 6.5% increase year over year.

“Consumer sentiment confirmed its early-month reading, falling back about 6% this October following two consecutive months of very little change,” reports Survey of Consumers director Joanne Hsu. “This decline was driven in large part by higher-income consumers and those with sizable stock holdings, consistent with recent weakness in equity markets. Across all consumers, one-year expected business conditions plunged 16% and expectations over consumers’ own personal finances in the year ahead fell 8%, reflecting ongoing concerns about inflation and, to a lesser degree, uncertainty over the implications of negative news both domestically and abroad. 

“Year-ahead inflation expectations rose from 3.2% last month to 4.2% this month, the highest reading since May 2023. Long-run inflation expectations edged up from 2.8% last month to 3.0% this month, again staying within the narrow 2.9-3.1% range for 25 of the last 27 months. Long-run inflation expectations remained elevated relative to the 2.2-2.6% range seen in the two years pre-pandemic.”