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The
index slipped to 68.9 in October from 70.1 in September, which
had been its highest reading since May. "Consumers continue to
express frustration over high prices,” said Joanne Hsu, director
of consumer surveys at University of Michigan.
Many consumers appear to be reserving judgement about the
economy while they wait for the presidential campaign to finish,
Hsu added.
Economists noted that the decline occurred after the Federal
Reserve cut its benchmark interest rate in September, while gas
prices have steadily fallen and overall inflation has cooled,
trends that should boost sentiment.
Yet Hurricane Helene and Middle East turmoil could have pushed
sentiment lower, Bradley Saunders, an economist at Capital
Economics, noted. And after falling in anticipation of the Fed's
rate cut, mortgage rates have climbed in the past two weeks.
The survey bottomed out in June 2022, when inflation peaked at
9.1%, and has since risen by about 40%, though it remains
significantly below pre-pandemic levels. In October, Republicans
reported a much clearer drop in sentiment than Democrats.
Still, consumers have kept spending despite their gloomy
responses to economic confidence surveys, buoying the economy.
Growth likely reached 3.2% in the July-September quarter, a
healthy pace, according to the Federal Reserve Bank of Atlanta.
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