Authored by Mike Shedlock via mishtalk,
Consumer Sentiment as measured by University of Michigan drops slightly.
Please consider the Preliminary University of Michigan Sentiment Report for October.
Overall, consumers perceive very few changes in the outlook for the economy from last month. Pocketbook issues like high prices and weakening job prospects remain at the forefront of consumers’ minds. At this time, consumers do not expect meaningful improvement in these factors. Meanwhile, interviews reveal little evidence that the ongoing federal government shutdown has moved consumers’ views of the economy thus far.
Year-ahead inflation expectations ebbed from 4.7% last month to a still-high 4.6% this month. Long-run inflation expectations held steady at 3.7%. Inflation expectations for both time horizons are about midway between the readings seen a year ago and the highs seen this year in April and May in the wake of the initial announcements of major tariff changes.
The main index only dropped 0.1 percentage points to 55.0 from 55.1. However, the three-month moving average fell 2.2 percentage points from 58.3 to 56.1.
Current Conditions vs. Expectations
The current conditions index ticked higher from 60.4 to 61.0 but the three-month moving average fell from 63.4 to 61.0.
The expectations index ticked lower from 51.7 to 51.2. Once again the three-month moving average had a bigger swing to the downside from 55.1 to 52.9, a drop of 2.2 percentage points.
University of Michigan Consumer Inflation Expectations
Inflation expectations were basically unchanged. One-year expectations fell 0.1 percentage point to 4.6 percent and 5-year expectations were flat at 3.7 percent.