US consumer sentiment stabilized in October despite inflation concerns

we Consumer sentiment Interest rates stabilized in October, although Americans remained concerned about the labor market and inflation as the government shutdown began.

The University of Michigan’s preliminary consumer confidence survey for October was little changed from last month, coming in at 55, with economists polled by LSEG estimating a more significant decline to 54.2, after the index posted a reading of 55.1 for September.

“Balance sheet issues such as rising prices and poor job prospects remain at the forefront of consumers’ minds,” Michigan Consumer Surveys said, adding that interviews with respondents showed little evidence that the shutdown “has changed consumers’ views of the economy so far.”

Consumer Survey Scale Inflation expectations over the next year to a still high level of 4.6% this month from 4.7% in September. Consumer expectations for inflation over the next five years remained unchanged at 3.7%.

Fed meeting minutes show that policymakers remain concerned about inflation as they consider interest rate cuts

Consumers were pessimistic about future personal finances and their views on current purchasing conditions for long-term manufactured goods were unfavorable.

Before the government data blackout, it was laboratory The pace of job growth has slowed, with job growth nearly halting in the three months leading up to August.

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The survey was conducted between September 22 and October 6. Government funding ended on September 30. Sentiment fell during previous lockdowns, and economists expect consumer sentiment data to be downgraded when the final data is published later this month.

“Michigan’s final survey for October will likely show a further deterioration, unless the lockdown ends very soon,” said Oliver Allen, chief US economist at Pantheon Macroeconomics.

The Fed’s preferred measure of inflation shows that consumer prices remained high in August

Despite high inflation expectations, economists say Federal Reserve The bank will continue to deliver another interest rate cut at its meeting on October 28-29.

Federal Reserve Bank Resume facilitation policy In September, it cut its benchmark overnight interest rate by 25 basis points to a range of 4.00%-4.25% amid signs of weakness in the labor market.

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Reuters contributed to this report.