WASHINGTON (dpa-AFX) - Consumer sentiment in the U.S. has deteriorated by more than expected in the month of October, according to preliminary data released by the University of Michigan on Friday.
The University of Michigan said its consumer sentiment index fell to 46.3 in October from 48.1 in September. Economists had expected the index to dip to 47.6.
With the bigger than expected decrease, the consumer sentiment index dropped to its lowest level since hitting a record low of 44.8 in May.
'Overall, sentiment for lower-income consumers and those with smaller stock portfolios dropped steeply this month, groups that have fewer resources to weather increases in prices,' said Surveys of Consumers Director Joanne Hsu.
She added, 'Frustration over cost-of-living continues to mount, as consumers across the political spectrum believe that the trajectory of the economy has weakened since the beginning of the year.'
The report said the current economic conditions index slumped to 44.7 in October from 50.9 in September, while the index of consumer expectations rose to 47.3 in October from 46.3 in September.
With regard to inflation expectations, the University of Michigan said year-ahead inflation expectations ticked up to 4.7 percent in October from 4.6 percent in September.
Hsu noted the current reading substantially exceeds the 3.4 percent seen in February before the Iran conflict began, along with all 2024 readings.
Long-run inflation expectations also crept up to 3.5 percent in October from 3.4 percent in September, notably higher than their 2024 range of 2.8 to 3.2 percent, the report said.
'Inflation expectations over both time horizons increased for the second straight month to their highest readings since May,' Hsu said.
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