Economic Confidence Hits Five-Month Low: Consumers ‘Frustrated' With High Prices

Core Insights - Americans' views on the U.S. economy have deteriorated to their lowest level in months, primarily due to rising prices and inflation concerns [1][5] Consumer Sentiment - Consumer sentiment decreased from a preliminary reading of 55.1 to 53.6 in October, marking the lowest reading since May and falling below Wall Street's expectations [2][3] - The sentiment regarding current economic conditions dropped from 60.4 in September to 58.6 in October, the lowest since August 2022 [3] Inflation Expectations - Americans expect prices to increase by 3.9% over the next five to ten years, up from a 3.7% forecast in September, and anticipate a 4.6% rise over the next year, slightly down from 4.7% [3] Price Increases - The Bureau of Labor Statistics reported a 3% increase in prices from September, with gas prices rising by 4.1%, the largest monthly increase among tracked items [4] Economic Optimism - The decline in economic optimism is attributed to consumer frustration with persistent high prices, with about half of respondents indicating their personal finances have worsened [5] - There is a perception of few material changes in economic circumstances from September to October, with inflation remaining a primary concern [5] Labor Market Concerns - Economic confidence has declined, with only 27% of consumers stating that jobs are "plentiful," the lowest since February 2021 [7] - The labor market appears to have worsened, with estimates suggesting only 17,000 jobs were added in September, and a reported decrease of 32,000 in private-sector payrolls [8] Federal Reserve Outlook - The Federal Reserve is expected to lower interest rates by a quarter-point to between 3.75% and 4% in its upcoming meeting on October 29 [6]