Persistent worries about the higher cost of living and few job opportunities pushed consumer sentiment down to its seventh-lowest level in October, on records going back to 1952.<\/p>\n
Consumer sentiment edged a hair lower early this month to a preliminary reading of 55, the University of Michigan said Friday \u2014 a weak level rarely seen in the post-World War II era. It\u2019s slightly above the lows it reached this spring when President Donald Trump unveiled massive tariffs.<\/p>\n
\u201cPocketbook issues like high prices and weakening job prospects remain at the forefront of consumers\u2019 minds,\u201d Joanne Hsu, the survey\u2019s director, said in a release. \u201cConsumers do not expect meaningful improvement in these factors.\u201d<\/p>\n
The shutdown of the federal government<\/a>, which stretched into its tenth day on Friday, has not so far affected Americans\u2019 perceptions about the economy, according to the survey. More than a million federal workers have been furloughed or are working without pay.<\/p>\n \u201cInterviews reveal little evidence that the ongoing federal government shutdown has moved consumers\u2019 views of the economy thus far,\u201d Hsu said.<\/p>\n The macroeconomic effects of the shutdown aren\u2019t significant, according to economists, but they get bigger the longer it lasts. The next Senate vote to fund the government is scheduled for Tuesday<\/a>, though Congress appears to remain deadlocked.<\/p>\n After a brief recovery, America\u2019s economic mood began to sour again in recent months on growing frustrations about higher prices and a weakening labor market, according to various surveys. Friday\u2019s survey showed \u201cdeclines in expectations for future personal finances as well as current buying conditions for durables.\u201d<\/p>\n Still, that may not mean much for the US economy: Sentiment hasn\u2019t been a good predictor of future spending in recent years. In the summer of 2022 when inflation was running at 40-year highs, sentiment plummeted to its lowest level on record, but Americans continued to spend later that year.<\/p>\n That dynamic has persisted. Sentiment has been weak this year, but Americans haven\u2019t cut back on their spending. Retail sales increased in August<\/a> for the third consecutive month, according to Commerce Department data, rising 0.6% from the prior month.<\/p>\n Economists say spending largely hinges on the health of the labor market, which has slowed recently, but remains fairly solid, with unemployment still relatively low. So long as layoffs aren\u2019t surging, Americans will likely continue to spend, despite their economic jitters.<\/p>\n But with the federal government shut down, the release of crucial economic statistics has been suspended, including the monthly jobs report, which was scheduled for October 3. However, alternative data by private companies and Federal Reserve regional banks, which aren\u2019t as affected by the shutdown, showed that the labor market continued to slow last month.<\/p>\n \u201cMany of the themes from September carried into October with the tough job market not inspiring confidence alongside persistent cost-of-living and high interest rate concerns,\u201d Oren Klachkin, financial market economist at Nationwide, wrote in an analyst note Friday.<\/p>\n