The US economic outlook has deteriorated somewhat after two months of small gains, according to the University of Michigan’s consumer confidence index released on Friday.
WASHINGTON — The US economic outlook has deteriorated somewhat this month after two months of small gains, according to the University of Michigan’s consumer confidence index released on Friday.
The index fell from 70.1 in September to 68.9 in October, which was the highest since May. “Consumers continue to express frustration with high prices,” said Joanne Hsu, director of consumer research at the University of Michigan.
Many consumers appear to be reserving judgment on the economy as they wait for the presidential campaign to end, Hsu added.
Economists noted that the decline occurred after the Federal Reserve lowered its benchmark interest rate in September, while gas prices and overall inflation have steadily declined has cooled downtrends that should boost sentiment.
Still, Hurricane Helene and unrest in the Middle East could have dented sentiment, noted Bradley Saunders, an economist at Capital Economics. And after falling in anticipation of the Fed’s rate cut, mortgage rates have risen over the past two weeks.
The survey bottomed out in June 2022, when inflation peaked at 9.1%, and has risen about 40% since then, although it is still significantly below pre-pandemic levels. In October, Republicans reported a much more pronounced decline in sentiment than Democrats.
Still, despite their downbeat responses to economic confidence surveys, consumers have continued to spend, supporting the economy. Growth likely reached 3.2% in the July-September quarter, a healthy pace, the report said Federal Reserve Bank of Atlanta.
