U.S. consumer confidence unexpectedly decreased for the first time in three months, reflecting persistent worries over high living costs despite optimism about the job market. According to the latest data, the University of Michigan's Consumer Confidence Index dropped to 68.9 in October, falling short of market expectations, which anticipated a rise to 70.8 from 70.1.
The report also highlighted declines in both the Current Conditions Index and the Expectations Index, which slipped to 62.7 from 63.3 and to 72.9 from 74.4, respectively, against expected readings of 64.3 and 75. Additionally, the one-year inflation expectation rose to 2.9% from 2.7%, marking the first increase in five months, while the long-term inflation expectation eased to 3% from 3.1%.
Despite a year of declining inflation rates, households remain burdened by high prices and expect that future price increases will outpace income growth. Consumer sentiment about their current financial conditions has reached its lowest since late 2022. Nevertheless, the survey revealed a decreased expectation of unemployment rate rises, with only 31% of consumers predicting an increase in the coming year—the lowest in ten months.
