Consumer sentiment in the U.S. has deteriorated by much more than anticipated in the month of October, according to preliminary data released by the University of Michigan on Friday.<\/p>\n
The University of Michigan said its consumer sentiment index slumped to 63.0 in October from 68.1 in September. Economists had expected the index to edge down to 67.4.<\/p>\n
“Assessments of personal finances declined about 15%, primarily on a substantial increase in concerns over inflation, and one-year expected business<\/span> conditions plunged about 19%,” said Surveys of Consumers Director Joanne Hsu.<\/p>\n She added, “However, long-run expected business conditions are little changed, suggesting that consumers believe the current worsening in economic conditions will not persist.”<\/p>\n The much steeper than expected drop by the headline index reflected notable decreases in both consumers’ assessments of current economic conditions and their expectations.<\/p>\n The current economic conditions index tumbled to 66.7 in October from 71.4 in September, while the index of consumer expectations plunged to 60.7 in October from 66.0 in September.<\/p>\n The report also showed a sharp increase in year-ahead inflation expectations, which jumped to 3.8 percent in October from 3.2 percent in September, reaching the highest level since May.<\/p>\n Long-run inflation expectations also rose to 3.0 percent in October from 2.8 percent in September but remained within the narrow 2.9-3.1 percent range seen for 25 of the last 27 months. <\/p>\n