Consumer Sentiment Declined 7.5% to 63 in Early October

Ann Arbor, MI, October 13, 2023-Consumer sentiment declined 7.5% to 63 in early October, according to preliminary results from the University of Michigan Survey of Consumers. 

This represents a 5.2% increase year over year.

“Consumer sentiment fell back about 7% this October following two consecutive months of very little change,” says Survey of Consumers director Joanne Hsu. “Assessments of personal finances declined about 15%, primarily on a substantial increase in concerns over inflation, and one-year expected business conditions plunged about 19%. However, long-run expected business conditions are little changed, suggesting that consumers believe the current worsening in economic conditions will not persist. Nearly all demographic groups posted setbacks in sentiment, reflecting the continued weight of high prices. 

“Year-ahead inflation expectations rose from 3.2% last month to 3.8% this month. The current reading is the highest since May 2023 and remains well above the 2.3-3.0% range seen in the two years prior to the pandemic. 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 remain elevated relative to the 2.2-2.6% range seen in the two years pre-pandemic.”