The University of Michigan's Consumer Sentiment Index finalized at 48.0 in October, down from 48.1 in September and below last October's 53.6. That's the second-lowest reading on record, trailing only May's all-time low of 44.8.
The Current Index dropped to 46.7 from 50.9, while the Expectations Index climbed to 48.8 from 46.3.
UMich consumer sentiment: September vs final October (as of Oct. 23, 2026)
- September
- October final
Bar chart. Index level. Sentiment index: September 48.10, October final 48. Current conditions: September 50.90, October final 46.70. Expectations: September 46.30, October final 48.80.
Buying conditions for durable goods drove the entire decline in current conditions, falling 18% on higher interest rates and affordability worries.
Homebuying sentiment collapsed, with 85% of consumers calling it a bad time to buy. Roughly 62% blamed high interest rates, up from 47% in September.
About 69% of consumers now expect rates to rise over the next year, the highest share since April 2023. Sentiment sits 10% below a year ago and 15% below February, just before the Iran conflict.
Independents are driving the weakness
Self-identified independents saw their sentiment score fall to 42.4 from 47.7, just above May's record-low 40.6, while Republicans and Democrats improved.
Since January, independents citing inflation as a drag on their finances rose 27%. Among Republicans, that figure jumped 52%, and among Democrats, 15%.
The survey landed days before the November 3 midterms, where control of Congress is at stake.
Spending hasn't cracked yet
Gloomy surveys have not translated into a pullback. Retail sales have held up as shoppers trade down to Walmart and off-brand goods, helped by higher nominal gasoline sales.
"Purchasing power continues to dominate consumer views of the economy."
Joanne Hsu, University of Michigan Surveys of Consumers
The Conference Board raised its 2026 GDP growth estimate to 2.2% from 1.9%, largely on business investment in artificial intelligence.
Concentration explains some of the resilience. The top 10% of earners account for 24% of all spending and the top 20% for 39%, per Allianz Trade economist Dan North.
Inflation expectations keep drifting higher. Five-year expectations rose to 3.5% from 3.4%, while year-ahead expectations hit 4.7%.
Inflation rose 3.7% year over year in the latest consumer price index report, and the Federal Reserve is expected to hold rates at 3.75% to 4.00% this week.
