Consumer Sentiment Declines 0.2% to 48 in October

Ann Arbor, MI, October 23, 2026—Consumer sentiment declined 0.2% to 48 in October, according to results from the University of Michigan’s Survey of Consumers. 

This represents a 10.4% decline year over year. 

“Consumer sentiment held steady this month, registering a scant one-tenth of an index point below September,” says Survey of Consumer director Joanne Hsu. “Increases in sentiment among Republicans and Democrats were balanced by declines among independents. While year-ahead business conditions improved about 14%, they stand 16% less than last October’s read. This month’s decline in the Current Conditions subindex was driven entirely by buying conditions for durables, which plunged 18% on the basis of higher interest rates and rising concerns about the affordability of such purchases. Purchasing power continues to dominate consumer views of the economy. Sentiment is now 10% below a year ago and 15% less than February, just prior to the Iran conflict.

“Year-ahead inflation expectations ticked up from 4.6% last month to 4.7% this month. The current reading substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 readings. Long-run inflation expectations also stepped up from 3.4% in September to 3.5%, notably higher than their 2024 range of 2.8% to 3.2%. Inflation expectations over both time horizons increased for the second straight month to their highest readings since May.”