Consumer Sentiment as measured by University of Michigan drops slightly.
Please consider the Preliminary University of Michigan Sentiment Report for October.
Overall, consumers perceive very few changes in the outlook for the economy from last month. Pocketbook issues like high prices and weakening job prospects remain at the forefront of consumers’ minds. At this time, consumers do not expect meaningful improvement in these factors. Meanwhile, interviews reveal little evidence that the ongoing federal government shutdown has moved consumers’ views of the economy thus far.
Year-ahead inflation expectations ebbed from 4.7% last month to a still-high 4.6% this month. Long-run inflation expectations held steady at 3.7%. Inflation expectations for both time horizons are about midway between the readings seen a year ago and the highs seen this year in April and May in the wake of the initial announcements of major tariff changes.
The main index only dropped 0.1 percentage points to 55.0 from 55.1. However, the three-month moving average fell 2.2 percentage points from 58.3 to 56.1.
Current Conditions vs. Expectations
The current conditions index ticked higher from 60.4 to 61.0 but the three-month moving average fell from 63.4 to 61.0.
The expectations index ticked lower from 51.7 to 51.2. Once again the three-month moving average had a bigger swing to the downside from 55.1 to 52.9, a drop of 2.2 percentage points.
University of Michigan Consumer Inflation Expectations
Inflation expectations were basically unchanged. One-year expectations fell 0.1 percentage point to 4.6 percent and 5-year expectations were flat at 3.7 percent.
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And finally, please consider A Sharp Deterioration in Consumers’ Views of their Current Situation
Consumer confidence declines again in September, led by current situation.
That report is by the highly respected Conference Board.
Key Points
- US consumer confidence fell in September to a five-month low on growing concerns about job prospects and the broader economy.
- A gauge of present conditions fell to the lowest level in a year, while a measure of expectations for the next six months also dropped in September.
- Expectations are below the threshold of 80 that typically signals a recession ahead since February 2025.
If the economy were simply left untouched, it would adjust and self-correct. Sure that probably means that most people’s labor would become “worth” less, but oh well, that also means prices for some or many items (and definitely assets) will come down as well.
More rate cuts fix this.
Plus handing out money. New York is going to give out $400 inflation fighting checks I believe.
And I thought bidenomics was a disappointment………..
Just examine ADP job numbers which show that job growth rate decreased starting in early 2022. The economy has been slowing before Trump took office this past January.
Exactly, the COVID recession lasted all but 4-6 weeks, making it an outlier. We haven’t been in a recession for 16 years. With nearing $38T in debt & $1.1T in interest expense & climbing, this is now a serious issue that TACO & the UniParty don’t seem to be willing to address.
Sure the tariffs are creating a drag, but the latest Q3 GDPNow number is 3.8% which includes a significant jump in net exports.
There’s COVID over hiring that’s been correcting like you say for two years, AI layoffs, higher inflation that the Fed & the bottom 50% can handle, massive home unaffordability, rising costs for insurance and at some point $2T deficits get baked in and are less inflationary that they were 3 years ago.
When the top 10% is accounting for half of the consumer spending that powers the economy, then something is legitimately out of whack. And it isn’t Trump’s tariff policies. It isn’t 2.2M illegals self-deporting & being deported. It isn’t the massive de-regulation that’s been taking place.
One could make the argument that without the massive spending on data centers, the economy would be in recession due to the loss of construction spending.
Precious metals are screaming that something is very wrong worldwide with the global economy, the status quo, fiat currencies, debt loads, government policies, and paper promises….
And fortunately or unfortunately, it’s a global issue, so we’re not going to have to go through the unpleasant results alone.
On Mon Macron, or his new #15 PM, will join Trump’s summit in Sharm El Sheikh Egypt along with the UK, Germany, Italy Qatar, Sultan Erdogan, MBS, Jordan, the UAE, Indonesia and Pakistan – SCO members – will celebrate the end of the war in Jasa. By Mon all hostages must be released. Bibi wasn’t invited.
Hamas will not disarm. Hamas recruited 7,000 new fighter to fight Israel’s proxies. Five colonel will rule Jasa.
It’s not just consumers. Mood in general has fallen since COVID. Movie critic Roeper pointed out horror films and dark movies are doing the best in theaters. Ultimate Fight Club is a gladiator sport, which is taking delight in watching humans beat the pulp out of each other. And protests going on in every major city.
I remember when Roeper wrote a column for the Southtown Economist, south/southwest Chicago burbs.
The US signed a twenty years deal to supply LNG to Sultan Erdogan and possibly a few SMRs, sending Putin and Sam Altman to the back of the line. Trump is infatuated with Qatar after helping him to stop the war in Jasa. Qatar is Nerd #2 supplier to China. If XACO will not cave in ==> blackouts will spread in Beijing. Cytokine storm is killing Palestinians in Jasa. Hamas is fighting 4 local tribes for power. The war between Israel and Hamas is over, but a civil war erupted in Jasa madhouse. These 4 are Israel proxies. They have unlimited supply. They are fully
committed to kill Hamas dogs. They are against foreign rulers from the west bank. They want to rule themselves. They trust Bibi and Tony Blair.
Walmart and DG will sell greeting cards and last year leftovers at twice the price. Xmas sales might slump. Air shipments from China will stop. XACO will cave in when hungry Chinese ants will climb on his forbidden city walls. The People Liberation Army will not shoot ants.
If Xmas sales sucks C/C debt will slump.
Well i observed prices rose during covid which was followed by wages. Think wage growth is what the fed had to crush to keep it from becoming a cycle.
This time we have prices increasing but i wonder if the government firings and ai layoffs will do the feds job for them.
Things are probably pretty bad. Imo Because there is a good chunk of the population that is retired and their consumption has been supporting employment. I would think if the stock market tanks the problem would get quickly worse.
4.6 expected while real inflation is closer 8 something? I expected to win the power ball lottery and that didnt happen. so much for expectations.
Haha i played the other day. I figured i could buy a ticket or buy a second doughnut. I pulled a dude and ate my dn while i purchased the ticket.
“As democracy is perfected, the office of President represents, more and more closely, the inner soul of the people. On some great and glorious day, the plain folks of the land will reach their heart’s desire at last and the White House will be adorned by a downright moron”. HLM
Mencken was being facetious of course in the phrase “As democracy is perfected…” Were he alive today, it would be clear to him that “democracy” is just a McGuffin the corrupt oligarchy uses. Nor would he find the term “moron” adequate to encapsulate Bush/Obama/Trump/Biden. But then, he was going for humor.
The Grinch who stole Xmas … Wait until the November Michigan consumer sentiment reports are released. About 80% of toys in the US (and maybe a greater % of decorations/lights) are made in China. The new 100% Chinese tariffs add-ons will heavily impact Xmas sales, where retailers like Walmart and Target make a chunk of their annual profit. This added consumption tax won’t be very popular.
2 dolls instead of 14
Christmas items are already here. If stores don’t have things in the warehouses by now, they aren’t going to get anything.
Some stores already have some Christmas items on the floor.
My grandmother who was born in the early 1930s told the family a story a few years ago. When she was a kid, she and her siblings received a few clothing items, one orange and a small bag of candy as Christmas presents. They never bought toys from China. People act like we need all these toys from China to help grow the U.S. economy. Haha. Maybe we need to go back to basics? Most of the toys end up being dumped in a landfill in a year or two.
Roughly half of U.S. states are effectively in a recession and ‘hanging on by their fingertips,’
https://fortune.com/2025/10/09/america-feels-recession-state-dependent-income-cohort-moody-zandi/
They just need to buy some Nvidia stocks and bitcoins.
Trump NFT digital collectible baseball cards, and $TRUMP meme coins, will restore our manufacturing base. Get yours before they, um, costlessly generate billions more!