US Consumer Sentiment Weakens as Inflation Pressures Households

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USA News | Updated October 10, 2026. The University of Michigan’s preliminary October survey showed a third consecutive monthly decline in US consumer sentiment, highlighting pressure from inflation and borrowing costs.

The latest survey figures

The index of consumer sentiment fell to 46.3 in October from 48.1 in September, below economists’ Reuters-polled forecast of 47.8. The measure of current economic conditions dropped to 44.7 from 50.9, a record low in the survey. Consumer expectations, by contrast, rose modestly to 47.3 from 46.3.

Inflation expectations remain elevated

Consumers expected inflation of 4.7% over the next year, compared with 4.6% in September. Their five-year expectation rose to 3.5% from 3.4%. These are survey expectations, not actual inflation readings.

Who is feeling the strain?

Survey director Joanne Hsu said lower-income consumers and those with smaller stock portfolios reported particularly steep declines in sentiment. Households face pressure from everyday expenses and the cost of credit. Rising energy prices linked to conflict in the Middle East have added to those concerns.

Does weak sentiment mean spending will fall?

Not necessarily. Reuters reported that higher-income households have continued to support consumer spending even as other households report financial strain. Economists caution that sentiment surveys measure perceptions and expectations; actual purchases can follow a different pattern.

How October compares with a year earlier

The University of Michigan preliminary table puts the October 2026 sentiment reading of 46.3 against 53.6 in October 2025, a decline of 13.6% over 12 months. The current-conditions index fell from 58.6 a year earlier to 44.7, a 23.7% drop. The expectations index was 47.3, down from 50.3 in October 2025. These comparisons help show the depth of household concern, but they are survey indicators, not measures of GDP or actual consumer spending. Source: University of Michigan preliminary October 2026 survey.

What to watch next

The final October survey release is scheduled for October 23. Investors and households will also monitor inflation releases and Federal Reserve decisions for signs of changes in borrowing costs.