American households closed October with their dimmest reading of the economy since the spring, and the reason they give has not changed in months: things cost too much.
The University of Michigan's final Index of Consumer Sentiment for October came in at 48.0, against 48.1 in September — statistically flat on the month, but 10.4% below the 53.6 recorded in October 2025. The preliminary October figure, 46.3, was revised up; that first estimate had been the second-lowest in the survey's history, behind the all-time low set in May.
Where the weakness sits
The two halves of the index moved in opposite directions.
- Current Economic Conditions: 46.7, down more than four points on the month and 20.3% lower than a year ago.
- Index of Consumer Expectations: 48.8, up about 2.5 points on the month, and 3.0% below October 2025.
According to Axios, the entire fall in the current conditions reading can be traced to one component: buying conditions for durable goods dropped 18%, squeezed by high prices and by borrowing costs that have not come down.
"Purchasing power continues to dominate consumer views of the economy," said Joanne Hsu, who directs the Surveys of Consumers.
Inflation expectations stay high
Consumers told the survey they expect prices to rise 4.7% over the next 12 months, and 3.5% a year over the long run — both well above the Federal Reserve's 2% target, and the kind of number that makes a central bank uncomfortable regardless of what the official inflation data says.
The Fed's policy committee meets on October 27 and 28, the next-to-last meeting of the year; the following one is December 8 and 9.
A partisan line that moved
One of the sharper findings is political. Axios reports that the share of Republicans naming high prices as a drag on their personal finances has risen by roughly 50 percentage points since January — a far bigger swing than among Democrats or independents, and sharpest among consumers with little or no money in the stock market.
That matters for the calendar more than for the economics. The reading lands ten days before the November 3 midterm elections, and it is one of the last broad snapshots of household mood before voting. The Conference Board's own October confidence survey is due on Tuesday, a week out from Election Day.
The gap between the two halves of the index is the detail worth holding onto: consumers are slightly less pessimistic about what is coming than they are about what they are living through right now. A rebound in sentiment, when it arrives, usually shows up there first.
Reporting from the University of Michigan's Surveys of Consumers, Axios and the Federal Reserve.
