The University of Michigan’s final October survey shows a small monthly decline and higher five-year inflation expectations ahead of the Federal Reserve’s next rate decision.
US consumer sentiment fell to 48.0 in the University of Michigan’s final October survey, its second-lowest reading on record, according to Al Jazeera’s October 23 report. Consumers also raised their expectations for inflation over the next five years to 3.5%.
The sentiment index was only slightly below September’s final reading of 48.1. Its record low was 44.8 in May, so October’s result extends a period of weak confidence rather than marking a sharp monthly fall.
| Measure | September 2026 | October 2026 |
|---|---|---|
| Consumer Sentiment Index | 48.1 | 48.0 |
| Five-year inflation expectations | 3.4% | 3.5% |
The sentiment index measures how people view their current finances, how they expect those finances to change over the next year and whether they think it is a good time for major household purchases. It also covers expectations for the US economy over one and five years. The inflation figure measures expected future price increases, not inflation already recorded.
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Hsu said overall consumer spending had remained relatively resilient despite those negative views, a contrast she described as a reason for caution. If some households are buying now to avoid expected price rises, she warned, slowing inflation could become harder. She presented that explanation as a possibility, not an established reason for the strength of spending.
The Federal Reserve’s next interest-rate decision is due on Wednesday. Al Jazeera reported that the central bank was widely expected to keep rates at 3.75–4.00%, after raising them by 0.25 percentage points in September.
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