The Consumer Sentiment Index released Friday by the University of Michigan (UM) Surveys of Consumers fell to 63.8 in the October 2023 survey, down from 67.9 in September but above last October’s 59.9.
The Current Index fell to 70.6, down from 71.1 in September but above last October’s 65.6. The Expectations Index fell to 59.3, down from 65.8 in September but above last October’s 56.2.
The overall index of economic news heard by consumers worsened about 15 percent between September and October, reaching its lowest reading since June 2023. Other negative headlines — war in the Middle East, the just-resolved leadership crisis in the U.S. House of Representatives, daily developments with former U.S. President Donald Trump’s legal troubles, among others — have produced their own drag on the sentiment as well.
After three months of little change, consumers’ confidence in government economic policies fell 8 percent to its lowest reading since May when the debt ceiling crisis was at its peak. About 15 percent of consumers spontaneously mentioned the autoworkers’ strike, up from 10 percent in September.
Growing concerns about inflation underpinned the 8-percent deterioration in consumers’ assessments of their personal finances in October. About 47 percent of consumers reported that high prices are eroding their living standards, up substantially from 39 percent in September.
While lower income consumers saw little change in their personal finances in recent months, middle- and higher-income consumers have expressed declines since August, reflecting in part recent weakness in stock markets.
One-year expected business conditions plunged 16 percent, and expectations over consumers’ own personal finances in the year ahead fell 8 percent, reflecting ongoing concerns about inflation, as well as uncertainty over the implications of negative news both domestically and abroad, according to chief economist Joanne Hsu, director of the surveys.
“While consumers recognize that inflation has slowed down from its peak last summer, they cannot ignore that their budgets remain stretched and their purchasing power reduced,” Hsu said.
The Surveys of Consumers is a rotating panel survey based on a nationally representative sample that gives each household in the coterminous United States an equal probability of being selected. Interviews are conducted throughout the month by telephone.
Source: Xinhua
