Topline
Americans continue to withhold optimism about the U.S. economy, as concerns about stubborn inflation and a declining job market persist, according to the University of Michigan’s widely tracked survey.
Rising prices and a weakening job market remain at the “forefront” of concerns.
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Key Facts
Consumer sentiment—a reading on Americans’ views on the economic outlook—decreased slightly to 55 in October from 55.1 in September, below the historical benchmark of 100 and the third-straight month of a decline, a preliminary reading of the University of Michigan’s survey found.
A drop in sentiment fell below Wall Street’s consensus of 55.8, according to FactSet.
Americans expect inflation to rise to 4.6% over the next year, below last month’s projections of 4.7%, and for prices to increase 3.7% over the next 10 years, matching September’s reading.
Why Are Consumers Pessimistic About The U.s. Economy?
Joanne Hsu, director of the University of Michigan’s survey, said Americans expressed improvements about their current financial situation and year-ahead business conditions, though they were offset by declines in expectations about their future finances. Issues like rising prices and weakening job prospects “remain at the forefront of consumers’ minds,” Hsu said, noting there is “little evidence” suggesting a government shutdown has disrupted consumers’ views on the economy.
What To Watch For
Whether the Bureau of Labor Statistics will unveil key inflation data next week. The agency, which has delayed reports about the labor market amid an ongoing government shutdown, will recall some furloughed employees to publish consumer price data, the Wall Street Journal reported, citing a Trump administration official.
Key Background
Optimism about the U.S. economy has steadily declined in recent months, according to surveys released by the University of Michigan and the Conference Board. Last week, the Conference Board reported its confidence index, the think tank’s measurement of consumers’ views on the economy, fell to the lowest reading since April, with respondents expressing lower expectations about the job market. Nearly 27% of consumers said jobs were “plentiful,” the lowest reading since February 2021, and consumers’ views about their current financial situation decreased in the largest monthly drop since the data was first collected in July 2022. It’s unclear whether the labor market further deteriorated in September, as the BLS has yet to release jobs data during the shutdown, though alternative data released by economists suggest the situation has become more grim. Fed Governor Christopher Waller said Friday that job growth has likely been negative over the last few months, noting the labor market remains the “punchline” for the central bank’s policy.
Further Reading
Source: https://www.forbes.com/sites/tylerroush/2025/10/10/economic-pessimism-remains-high-among-americans-survey-says/
