Source: Economics Group of Wells Fargo Bank, N.A.
Summary
The University of Michigan’s consumer sentiment index declined to 68.9 in October, as consumers increasingly report worries about both their household income situation and higher prices more generally. Inflation expectations in both the short and long term continue to remain well anchored.
Sour Sentiment Persists
Consumer sentiment declined 1.2 points to 68.9 in October, the first decrease in three months (chart). Sentiment has remained within a narrow band for the prior six months and is still significantly below where it was through the first quarter of the year. Current economic conditions fell a touch to 62.7, and the consumer expectations index followed suit, declining 1.5 points to 72.9. Although the October release of the consumer sentiment report was marginally worse than September, the report is a continuation of the downbeat mood consumers have carried with them for most of the year.
Perceptions of household finances have yet to rebound to where they were at the beginning of the year. The share of consumers reporting their household finances were better off than a year ago was 26%, while the share reporting that their household finances were worse off than a year ago was 48%.