US consumer sentiment holds at 48.0; year-ahead inflation expectations rise to 4.7%

US consumer sentiment was little changed in October, according to the University of Michigan's Surveys of Consumers. The final reading of the Index of Consumer Sentiment was 48.0, against 48.1 in September and 53.6 in October 2025.

What happened

The index of current economic conditions fell 8.3% to 46.7 from 50.9 in September and was 20.3% below October 2025. The index of consumer expectations rose 5.4% to 48.8 from 46.3, and was 3.0% below a year earlier. Joanne Hsu, director of the surveys, said the decline in current conditions "was driven entirely by buying conditions for durables, which plunged 18% on the basis of higher interest rates and rising concerns about the affordability of such purchases."

Year-ahead business conditions improved about 14% from September but remained 16% below last October's reading, Hsu said. She said that "purchasing power continues to dominate consumer views of the economy" and that sentiment is "10% below a year ago and 15% less than February, just prior to the Iran conflict."

Inflation expectations

Consumers expect prices to rise 4.7% over the next year, up from 4.6% in September and 3.4% in February, before the Iran conflict began. Long-run expectations rose to 3.5% from 3.4%, above the 2.8% to 3.2% range of 2024. Both measures increased for a second straight month, to their highest levels since May, according to the survey.

What to watch

The preliminary November reading is due on Friday, November 6, at 10 a.m. Eastern time. The university also published a special report on October 23 on long-run inflation expectations.