October’s consumer sentiment reading has essentially kept pace with September, though consumers’ long-term views are less optimistic.

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Data from the University of Michigan Survey of Consumers released Friday (Oct. 23) showed October’s reading at a revised 48.0, up from an initial 46.3 and in keeping with the 48.1 recorded in September.

Although year-ahead business conditions ticked up around 14%, they are still 16% less than the reading from October 2025. The survey saw a decline in its Current Conditions subindex, fueled entirely by buying conditions for durables, which dropped 18% due to higher interest rates and concerns about the affordability of these purchases.

“Purchasing power continues to dominate consumer views of the economy,” said Joanne Hsu, director of the survey. “Sentiment is now 10% below a year ago and 15% less than February, just prior to the Iran conflict.”

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Also Friday, the survey released a special report which said that — following five years of above-target inflation — both short-term and long-term inflation expectations have risen in recent months, leading to risks that heightened inflation expectations could become entrenched.

“The entrenchment of elevated inflation expectations and proliferation of inflationary psychology may not be inevitable, but interviews with consumers and the historical record both suggest that risks are present,” the report said.

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