US consumer sentiment deteriorates further in October

US consumer sentiment deteriorated further in early October as rising prices because of the Middle East conflict soured households' views of the economy, a survey showed on Friday.

The University of Michigan's Surveys of Consumers said its Consumer Sentiment Index dropped to 46.3 this month from a final reading of 48.1 in September. Economists polled by Reuters had forecast the index at 47.8. 

"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, the director of the Surveys of Consumers. "Overall, sentiment for lower-income consumers and those with smaller stock portfolios dropped steeply this month, groups that have fewer resources to weather increases in prices."

The survey's measure of consumer expectations for inflation over the next year nudged up to 4.7 percent from 4.6 percent in September. Twelve-month inflation expectations have surged from 3.4 percent in February before the US-Israeli war with Iran started. 

Consumers' expectations for inflation over the next five years rose to 3.5 percent from 3.4 percent in September.

Reuters

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