Consumer Sentiment Holds Steady in October
Consumer sentiment, also known as consumer confidence, measures how U.S. consumers feel about the economy, wages, jobs and their personal finances.
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
Updated · 7 min read
Written by
Senior Writer & Content Strategist 
Edited by
Senior Editor & Content Strategist Updated on Oct. 28.
Conference Board: Confidence remains unchanged in October
The Conference Board’s Consumer Confidence Index report for October (released Oct .28) went down by 1 point in October to 94.6 from September’s upwardly revised figure of 95.6. The Present Situation Index rose, while the Expectations Index declined.
Consumers are more optimistic about current business conditions, as well as current job availability compared to September, according to commentary by Stephanie Guichard, a senior economist at The Conference Board, in a press release. But there’s still pessimism about the future.
“All three components of the Expectations Index weakened somewhat,” said Guichard. “Consumers were a bit more pessimistic about future job availability and future business conditions while optimism about future income retreated slightly.”
Some key takeaways from the report:
- Inflation, political concerns continue. Guichard said consumer’s write-in responses mainly referenced prices and inflation. Consumers also expressed concern about U.S. politics, as well as the government shutdown.
- Stock price expectations remain strong. Nearly half of all consumers expert stock price increases in the next 12 months.
- Consumers think the U.S. economy has tanked. For the third month in a row, consumers said they believe the economy is in a recession.
- Consumers expect lower holiday spending. Consumers say they’ll likely spend 3.9% less on gifts and 12% less on non-gifts heading into the holiday season.
More findings from the Conference Board
The Conference Board’s Consumer Confidence Index went down 1 point in October’s report to 94.6, the latest report released on Oct. 28 shows.
The board’s Present Situation Index — measuring consumers’ current assessment of business and labor market conditions — rose 1.8 points to 129.3.
The Expectations Index — measuring consumers’ short-term outlook for income, business and labor market conditions — declined 2.9 points to 71.5. The same index was at 54.4 in April, the lowest level in nearly 14 years.
University of Michigan: Index steady in October
The University of Michigan’s Index of Consumer Sentiment held steady in October, according to the second report for the month released on Oct. 24.
Joanne Hsu, who directs consumer surveys at the University of Michigan, said that inflation and high prices remain consumers’ top concerns, while the government shutdown is less relevant.
“There was little evidence this month that consumers connect the federal government shutdown to the economy,” said Hsu, in the report. “Only about 2% spontaneously referenced the shutdown during this month’s interviews, compared with the 10% of consumers who did so in January 2019 during that 35-day shutdown.”
Hsu also noted an uptick in sentiment among young consumers, offsetting declines among middle-age and older consumers.
More findings from the University of Michigan
The University of Michigan Index of Consumer Sentiment’s final reading for October registered at 53.6, compared to September’s reading of 55.1, according to the second survey released on Oct. 24.
The university’s Index of Current Economic Conditions registered at 58.6 for October, compared to 60.4 in September, while the Index of Consumer Expectations went down to 50.3 in October, compared to 51.7 in September. The Consumer Sentiment Index now sits 0.3 points higher than its all-time historic low of 50 in June 2022.
New York Fed: Inflation fears tick upward
The New York Fed’s Survey of Consumer Expectations for September, released on Oct. 7, shows consumers’ short-term inflation expectations continue to tick upward in the short and long terms (while remaining unchanged at the medium term). Job market expectations continued to deteriorate.
- Inflation: Median inflation expectations for the next year increased to 3.4% in September from 3.2% in August. The expectation that inflation would increase over the next three years was unchanged at 3%, while expectations at the five-year horizon rose slightly from 2.9% to 3.0%.
- Job security: The likelihood of the unemployment rate rising in the next year increased to 41.1% in September from 39.1% in August from 37.4%. The probability of finding a job rose to 47.4% from 44.9%. That remains below the 12-month trailing average of 51.0%.
- Personal finance: The expectation for Americans’ household financial situation in the next year was largely unchanged.
What is consumer sentiment?
Consumer sentiment, also known as consumer confidence, is an index of how U.S. consumers are feeling about the current and future state of the economy, and all that folds into the economy: the job market, wages, business conditions and their personal finances. It’s a valuable tool for economists, as consumer sentiment can be used as an early predictor of economic changes.
How people feel about the economy can directly impact the economy, because consumers' attitudes often affect how much they spend on things like food, transportation, household goods, entertainment and more.
» Stay informed: Check out our news hub for all the latest.
In 2023, consumers’ personal spending made up 67.9% of the U.S. GDP, or gross domestic product, according to the Federal Reserve Bank of St. Louis. That’s a significant majority of the nation’s GDP, so keeping a close eye on consumer sentiment is key in foreseeing potential economic slumps or rallies.
When the economy is in a recession, consumer sentiment falls. On the flip side, when the economy is expanding, consumer sentiment rises. The index does typically peak before a recession, though.
Unlike other indexes, such as the Consumer Price Index (CPI), consumer sentiment isn’t calculated using spending data or hard figures. Instead, economists rely on two major surveys of consumer confidence: The University of Michigan’s Surveys of Consumers and the Conference Board’s Consumer Confidence Survey.
Each survey collects the general attitudes and opinions of hundreds of U.S. consumers. Then, those opinions are assigned numeric values and aggregated into one number, or index.
More stories like this? Yes, please!
Find exclusive content, rich storytelling, first-person accounts, trending news and original reporting in the NerdWallet app.
What is consumer sentiment like right now?
The University of Michigan’s Index of Consumer Sentiment
The final reading for October from the University of Michigan, released on Oct. 24, shows:
- The Index of Consumer Sentiment registered at 53.6 for October, down from 55.1 for September.
- Current Economic Conditions registered at 58.6 for October, down from 60.4 for September.
- The Index of Consumer Expectations registered at 50.3 for October, down from 51.7 for September.
How the University of Michigan creates its index
The Index of Consumer Sentiment is one of three indexes derived from the University of Michigan’s Surveys of Consumers, which started in 1946. Originally conducted annually, the surveys switched to a monthly cadence in 1978. The surveys have a sample size of roughly 600 people selected randomly from the 48 adjoining U.S. states and the District of Columbia.
The surveys include roughly 50 questions covering personal finances, business conditions and buying conditions. From those surveyed, three indexes are produced: the Index of Consumer Sentiment, the Index of Consumer Expectations and the Index of Current Economic Conditions.
The Index of Consumer Sentiment is the most commonly cited index of the bunch. It’s derived from these five questions:
- "We are interested in how people are getting along financially these days. Would you say that you (and your family living there) are better off or worse off financially than you were a year ago?"
- "Now, looking ahead: Do you think that a year from now you (and your family living there) will be better off financially, or worse off, or just about the same as now?"
- "Now, turning to business conditions in the country as a whole. Do you think that during the next twelve months we'll have good times financially, or bad times, or what?"
- "Looking ahead, which would you say is more likely: that in the country as a whole we'll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?"
- "About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or bad time for people to buy major household items?"
Historically, the surveys have been conducted by phone. Starting in July 2024, they'll be conducted online, with researchers aiming for 900 to 1,000 respondents.
The Conference Board’s Consumer Confidence Index
Conference Board data for October, released on Oct. 28, shows:
- The Conference Board’s Consumer Confidence Index fell 1 point to 94.6, from 95.6 in September.
- The Present Situation Index rose 1.8 points to 129.3.
- The Expectations Index decreased 2.9 points to 71.5.
How the Conference Board’s Consumer Confidence Index comes together
The Conference Board’s Consumer Confidence Survey was launched in 1967 as a mail survey conducted every other month. Today, the survey is conducted online, on a monthly basis, with a sample size of roughly 3,000 respondents.
The Conference Board issues a five-question survey to calculate three distinct indexes: the Consumer Confidence Index, the Present Situation Index and the Expectations Index. Once the surveys have been completed, each question is given a relative value. Then, those values are compared against their relative values from 1985 — the survey’s benchmark year, with an index set at 100.
The Consumer Confidence Index is the average index for all five questions. The Present Situation Index is calculated using the average indexes for the first two questions, and the remaining three questions determine the Expectations Index.
Present Situation Index
- Respondents’ appraisal of current business conditions.
- Respondents’ appraisal of current employment conditions.
Expectations Index
- Respondents’ expectations regarding business conditions six months hence.
- Respondents’ expectations regarding employment conditions six months hence.
- Respondents’ expectations regarding their total family income six months hence.
Consumer Confidence Index
This is the average index for all five questions above.
The Federal Reserve Bank of New York’s Survey of Consumer Expectations
The highlights for September from the Federal Reserve Bank of New York’s Survey of Consumer Expectations released on Oct. 7 shows:
- Inflation. Median inflation expectations increased by 0.2 percentage point to 3.4% for the one-year ahead horizon, held steady at the three-year horizon (3%), and rose slightly at the five-year horizon (3%).
- Commodity prices. Year-ahead price expectations increased for multiple categories including food (up 0.3 percentage point to 5.8%); gas (up 0.3 percentage point to 4.2%); rent (up 1 full percentage point to 7%); and medical care (up 0.5 percentage point to 9.3%).
- Home price growth. Median year-ahead home price growth expectations held steady at 3%. Since August 2023, the range has moved between 3% and 3.3%.
- Earnings expectations. Median one-year-ahead expectations for earnings growth went down by 0.1 percentage point to 2.4%.
- Unemployment expectations. The mean probability that the unemployment rate will increase a year from now increased by 2.0 percentage points to 41.1%.
- Probability of job loss. The mean expectation of job loss over the next 12 months went up by 0.4 percentage point to 14.9% — higher than the trailing 12-month average of 14.1%.
- Probability of quitting. The mean expectation of quitting a job over the next 12 months went up by 1.8 percentage points to 20.7%.
- Probability of finding a job if job loss occurs. The mean perceived probability of finding a job over the next 12 months rebounded by 2.5 percentage points to 47.4%, below the 12-month trailing average of 51.0%.
- Household income growth. The median expectation of household income growth held steady at 2.9%.
- Household spending growth. Households expect to spend 4.7% more over the next year, a 0.3 percentage point decrease.
- Credit access. Perceptions of credit access were largely unchanged from a year ago.
How the Federal Reserve Bank of New York conducts its survey
The Federal Reserve Bank of New York’s Survey of Consumer Expectations focuses on expectations about economic outcomes.
The survey, which is conducted by NielsenIQ, launched in 2013. It’s an internet-based survey that asks a rotating panel of 1,300 heads-of-household about their expectations of the economy, as well as their own personal finances related to the following categories:
Inflation:
- Inflation expectations.
- Inflation uncertainty.
- Probability of different inflation outcomes.
- Home price change expectations.
- Home price change uncertainty.
- Commodity price change expectations.
Labor market:
- Earnings growth expectations.
- Earnings growth uncertainty.
- Job separation expectations.
- Job finding expectations.
- Moving expectations.
- Expectations of higher unemployment.
Household finance:
- Household income growth expectations. Household spending growth expectations. Change in taxes. Change in credit availability. Debt delinquency expectations. Expectations of higher interest rate on savings accounts. Household financial situation.Expectations of higher stock prices. Government debt growth expectations.
When do the next consumer sentiment reports come out?
The University of Michigan’s next set of results for its Surveys of Consumers will be released on Friday, Nov. 7.
The Conference Board will release its next Consumer Confidence Survey on Tuesday, Nov. 25.
The New York Fed will release its next Survey of Consumer Expectations on Friday, Nov. 7.
Article sources
NerdWallet writers are subject matter authorities who use primary,
trustworthy sources to inform their work, including peer-reviewed
studies, government websites, academic research and interviews with
industry experts. All content is fact-checked for accuracy, timeliness
and relevance. You can learn more about NerdWallet's high
standards for journalism by reading our
editorial guidelines.
