US consumer sentiment near record low ahead of midterm elections
SPY•The University of Michigan's Consumer Sentiment Index edged down to 48.0 in October from 48.1 in September, its second-lowest reading on record. One-year inflation expectations rose to 4.7% from 4.6%.
1. Sentiment stays near low
The University of Michigan's Consumer Sentiment Index slipped to 48.0 in October from 48.1 in September, marking the second-lowest reading on record after May's 44.8. Economists polled by Reuters had forecast 46.3. Survey director Joanne Hsu said purchasing power continued to dominate consumer views of the economy.
2. Independents report weaker views
Sentiment among independent voters fell to 42.4 from 47.7 in September, just above May's record-low 40.6, while scores for Democrats and Republicans improved. Since January, the number of independents citing inflation pressures as a drag on their finances rose 27%; the increase among Republicans was 52% and among Democrats 15%.
3. Inflation expectations rise
One-year inflation expectations increased to 4.7% from 4.6% in September, up from 3.4% in February. Five-year expectations rose to 3.5% from 3.4% in September. Fed officials are broadly expected to leave their policy rate unchanged at 3.75%-4.00% next week, after raising it by a quarter percentage point in September.
