US consumer sentiment falls to 46.3, close to a record low

US consumer sentiment weakened again in early October as energy-driven living costs weighed on households, Reuters reported on 9 October.

The numbers

• The University of Michigan consumer sentiment index fell to 46.3 from 48.1 in September — a third straight monthly drop and close to the record low set in May. Economists polled by Reuters had expected 47.8.
• The current-conditions gauge slid to an all-time low of 44.7 from 50.9.
• Expected inflation over the next 12 months edged up to 4.7% from 4.6%; in February, before the US-Israeli war with Iran began, it was 3.4%.
• Expectations improved modestly, but buying conditions for durable goods plunged because of high prices and borrowing costs.

Rates backdrop

The Federal Reserve raised its benchmark rate by 25 basis points in September to 3.75%–4.00%, its first hike in three years, and signalled more could follow. According to Reuters, weak September payrolls and cooler July–August inflation readings reduced the odds of an October move; economists expect a hike in December.