American consumer sentiment has sunk to near-record lows in October 2026, with the University of Michigan's preliminary reading falling to 46.3 — the third straight monthly decline and the second-lowest score since the survey began in 1952 — as frustration over the cost of living keeps mounting just weeks before the November 3 midterm elections.
Sentiment plunges to 46.3, missing forecasts
The preliminary October reading, released Friday, October 9, 2026, dropped from a final September score of 48.1 — a 1.8-point fall that missed every economist forecast. Reuters-polled economists had expected 47.8, a Wall Street Journal poll expected 48, and Bloomberg's median forecast was 47.6.
If the score holds in the final October reading due October 23, it would be the second-lowest reading on record, surpassed only by the all-time low of 44.8 set in May 2026. Responses were collected from September 22 through October 5.
Current conditions hit an all-time low
The breakdown was bleak. The Current Economic Conditions Index fell to 44.7 — down 12.2% from September's 50.9 and 23.7% below the 58.6 reading a year ago — marking an all-time low. Consumers said buying conditions for durable goods had "plunged" on high prices and expensive borrowing.
The Index of Consumer Expectations offered a rare bright spot, rising 2.2% to 47.3 — its first increase since July — though it remains 6.0% below last year's level. Lower-income households, consumers with smaller stock portfolios, and political independents were hit hardest.
Inflation expectations climb again
Year-ahead inflation expectations rose to 4.7% from 4.6% in September — up sharply from 3.4% in February, before the US-Israeli war with Iran began — while long-run expectations climbed to 3.5% from 3.4%. Both horizons rose for a second straight month to their highest since May.
Soaring fuel costs from Middle East conflict fallout, persistent inflation, and borrowing costs weighed heavily. The Federal Reserve raised its benchmark rate on September 16 by 25 basis points to 3.75–4.00%, its first hike in more than three years, while September unemployment stood at 4.2%.
Closing takeaway
"Frustration over cost-of-living continues to mount, as consumers across the political spectrum believe that the trajectory of the economy has weakened since the beginning of the year," said Joanne Hsu, director of the Surveys of Consumers. With actual consumer spending staying afloat on stock-market wealth gains — a widening "K-shaped" split — the gloom could become a decisive factor when voters head to the polls on November 3.
Watch: Latest videos on US consumer sentiment and the October 2026 Michigan survey
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