Consumer sentiment in the United States fell for a third consecutive month in early October, approaching historic lows as rising energy prices and persistent inflation intensified financial pressure on American households.
Preliminary figures from the University of Michigan showed its consumer sentiment index declining to 46.3 in October, reflecting growing concerns about the cost of living and the outlook for the US economy.
The index measuring consumers’ assessment of current economic conditions dropped to 44.7, its lowest level on record.
The deterioration comes as the conflict involving the United States, Israel and Iran continues to disrupt energy markets, contributing to higher fuel costs and renewed inflationary pressures.
Lower-income households and consumers with limited stock market investments have been particularly affected by rising living expenses, according to the survey findings.
Americans also reported growing concerns about future price increases. Their expectations for inflation over the next year rose to 4.7%, while longer-term inflation expectations reached 3.5%.
The figures suggest that many households remain unconvinced that inflation will return quickly to more manageable levels.
Consumer sentiment is closely monitored by economists and Federal Reserve policymakers because it provides an indication of how Americans perceive their financial circumstances and future economic prospects.
However, weak confidence does not necessarily translate immediately into reduced consumer spending.
Spending has remained comparatively resilient, supported in part by higher-income households benefiting from gains in financial markets. This has created a divide between Americans whose finances are supported by investment assets and those more directly exposed to higher everyday costs.
The latest survey comes after the Federal Reserve raised interest rates in September, its first increase in three years, as policymakers sought to contain inflation.
Further monetary policy decisions will depend on incoming economic data, including inflation figures and labour market conditions.
Higher interest rates can help slow price increases by reducing borrowing and demand, but they also raise financing costs for households and businesses.
For American consumers, the immediate concern remains the cost of essentials, particularly fuel, transportation and other expenses affected by energy prices.
The University of Michigan’s preliminary October results underline the challenge facing US policymakers: controlling inflation while preserving economic growth and household purchasing power.
The final October survey will provide a more complete picture of whether consumer confidence continues to weaken or begins to stabilize.
