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Consumer Confidence Steady Despite Darkening Economic Outlook
10 Oct
Summary
- Consumer sentiment index holds at 55 in October
- Current conditions improve, but future expectations decline
- Inflation expectations little changed at 4.6% over next year
On October 10, 2025, the latest University of Michigan Consumer Sentiment report offered a mixed picture of the American consumer's mindset. The preliminary October index came in at 55, down slightly from 55.1 in September but mostly in line with analyst expectations.
The current conditions component of the index ticked up to 61 from 60.4 the prior month, suggesting consumers felt relatively confident about the present economic situation. However, the future expectations component declined to 51.2 from 51.7, indicating growing concerns about the economic outlook.
Inflation expectations also remained elevated, with consumers expecting prices to rise 4.6% over the next year, only slightly lower than the 4.7% expected in the previous report. Over the next five years, they forecast inflation of 3.7%, unchanged from the prior month.
Despite the tepid mood, the U.S. stock market opened higher on the day, with the Dow Jones Industrial Average gaining 0.59% and the S&P 500 and Nasdaq Composite also posting modest gains. Investors appeared to take the consumer sentiment data in stride, focusing instead on the start of the third-quarter earnings season, which had kicked off the previous day with strong results from companies like Delta Air Lines, PepsiCo, and Levi Strauss.
