Consumer sentiment around the U.S. dipped in October, sinking to a five-month low as Americans fret over a stalling job market and stubbornly high inflation, new private economic data shows.
The University of Michigan’s preliminary October sentiment index, released Friday, shows consumer sentiment fell 0.1% on a monthly basis, from 55.1 points in September to 55. While the drop was nominal, it represents the third consecutive month the confidence measure, which is closely watched by investors, has declined.
“The net percentage of households expecting the unemployment rate to rise over the next year dipped to 48% in October, down from the recent high of 53% in September, but still a far bleaker picture than at the start of the year and historically consistent with a sharp rise in joblessness in the months ahead,” Oliver Allen, senior U.S. economist with Pantheon Macroeconomics, said in a report.
Americans remain concerned about high prices, with expectations for inflation over the next year still hovering at elevated levels. Weakening job prospects also remain top of mind for Americans, Joanne Hsu, director of the Surveys of Consumers at U. of Michigan, said in a statement.
“At this time, consumers do not expect meaningful improvement in these factors,” she said.
The latest University of Michigan reading provides a sliver of insight into the economy at a time when other benchmarks are unavailable due to a data blackout tied to the ongoing government shutdown.
The Department of Labor was scheduled to release monthly September jobs numbers on Oct. 3, but that report remains on hold after the agency said it would suspend operations.
While the University of Michigan index shows consumer sentiment was virtually unchanged from September, other data points to ongoing concerns about the economy. The percentage of people saying the economy is getting worse ticked up to 59% in October compared to 54% in July, according to a recent CBS News poll.
Despite such concerns, other signals show the economy holding up. A Bank of America report released Friday shows credit and debit card spending per household rose 2% in September from a year ago, up from 1.7% in August.
Alexandra Brown, North America economist at Capital Economics, said in a research note that consumer spending growth is likely to remain healthy in the final three months of 2025.
