Consumer sentiment was essentially unchanged this month, slipping a scant 1.5 index points from September, according to the University of Michigan Surveys of Consumers.
A modest increase in sentiment among younger consumers was offset by decreases among middle-aged and older consumers. Current personal finances inched up, while expected personal finances receded, said U-M economist Joanne Hsu, director of the surveys.
Overall, consumers see few material changes in economic circumstances from last month, she said, as inflation and high prices remain at the forefront of consumers' minds.
"There was little evidence this month that consumers are connecting the federal government shutdown to the economy," Hsu said. "Only a handful of consumers mentioned the shutdown during this month's interviews, compared with the 10% of consumers who did so in January 2019 during that 35-day shutdown."
Continued frustration over high prices
About 46% of consumers reported that their personal finances are worse than they were a year ago, unchanged from October 2024.
Consumers remain frustrated by the persistence of high prices, spontaneously mentioning high prices at various points throughout the interviews. About 45% of consumers referenced that their personal finances were eroded by high prices, the highest reading since August 2024.
Similar concerns arose for big ticket purchases as well. For large household durables, buying conditions worsened this month as a rising share of consumers negatively referenced prices or tariffs. Buying conditions for vehicles are more than 20% below a year ago, with 39% of consumers citing high prices.
Consumers take note of falling interest rates
Consumer views of major purchases have started to incorporate last month's interest rate cut by the Federal Reserve, Hsu said. The share of consumers blaming high interest rates or tight credit for poor buying conditions for homes and cars receded in October. Still, interest rate concerns remain considerably elevated relative to early 2022 and the years prior.
At this time, consumers are divided on whether or not further relief with borrowing costs are on the horizon, according to Hsu. A plurality of consumers, about 42%, expect interest rates to fall in the next year, down from 47% last month and 52% a year ago. About 31% expect rates to hold steady, while just under a quarter of consumers expect rates to increase.
Consumer Sentiment Index
The Consumer Sentiment Index fell to 53.6 in the October 2025 survey, down from 55.1 in September and below last October's 70.5. The Current Index fell to 58.6, down from 60.4 in September and below last October's 64.9. The Expectations Index fell to 50.3, down from 51.7 in September and below last October's 74.1.
About the surveys
The Surveys of Consumers is a rotating panel survey at the University of Michigan Institute for Social Research. It is based on a nationally representative sample that gives each household in the coterminous U.S. an equal probability of being selected. Interviews are conducted throughout the month by web. The minimum monthly change required for significance at the 95% level in the Sentiment Index is 4.8 points; for the Current Economic Conditions Index and Index of Consumer Expectations, the minimum is 6 points.
About ISR
Established in 1949, the Institute for Social Research at the University of Michigan is among the world's oldest social science research organizations and a world leader in the development and application of social science methodology. ISR conducts some of the most widely cited surveys and studies in the nation, including the U-M Surveys of Consumers, American National Election Studies, Monitoring the Future Study, Panel Study of Income Dynamics, Health and Retirement Study, National Survey of Black Americans and World Values Survey. ISR is also home to the Inter-University Consortium for Political and Social Research, which maintains the world's largest computerized social science data archive.
