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📂 Category: Economic News,News
✅ Key idea:
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Key takeaways
- The Michigan Consumer Survey showed that the public’s view of current economic conditions in October was the lowest since 2022.
- While inflation fears persist, the survey also showed that a growing number of consumers are concerned about job losses amid weak employment numbers this summer.
- Nearly half of consumers said higher prices were impacting their personal finances, even as inflation expectations fell slightly this month.
Concerns about job losses and continuing price pressures are adding to the anxiety.
The Michigan Consumer Survey’s measure of current economic sentiment fell in October to its lowest levels since August 2022, when a sharp rise in inflation was hurting consumers. Concerns about the labor market are fueling the current decline in consumer sentiment, according to Navy Federal Credit Union chief economist Heather Long.
Why is this important to consumers?
If consumers have negative feelings about the economy, this will likely influence their spending decisions. This is likely to impact other sectors of the US economy, largely supported by consumer spending levels.
“The anxiety has returned for American consumers,” Long wrote. “More than 60% are concerned that unemployment will rise next year, and nearly 70% do not think the government is doing a good enough job of combating inflation and unemployment.”
While employment data showed the labor market softened this summer, the September jobs report was delayed due to the ongoing government shutdown.
“The key to the economy is to prevent further job losses,” Long wrote. “If the fear of job losses decreases, sentiment is likely to improve, especially among the middle class.”
Morale declines for the third month in a row as prices pressure the middle class
The influential poll showed that consumers also remained concerned about prices, but expressed few concerns about the ongoing government shutdown. About 45% of consumers told respondents that higher prices are eroding their personal finances, with a roughly equal share saying their personal finances are worse than they were a year ago.
“The K-shaped economy is causing a lot of stress for middle-class and middle-income Americans,” Long said. “Food and electricity prices are rising rapidly. Households are trying to make every dollar count by shopping at discount stores, but it’s not easy having to switch meal plans and shopping patterns to cut costs.”
Despite this, inflation expectations fell slightly in the October survey. Consumers now expect prices to rise 4.6% over the next year, down from high levels seen in May amid Trump’s tariff push. The data comes as the release of today’s CPI inflation report showed that price pressures increased again in September, but not to the level economists had expected.
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