American consumers are feeling worse about the economy than at almost any point on record, according to a new reading from the University of Michigan’s closely watched Surveys of Consumers.
The sentiment index fell to 46.3 in early October from 48.1 in September, the third consecutive monthly decline. The reading came in below economists’ forecast of 47.8 and sits near the record low recorded in May, according to reports.
The rising cost of living appears to be the main culprit. Households are souring on their finances as prices climb, partly driven by higher energy costs tied to the Middle East conflict. The decline was especially sharp among lower-income consumers and Independents, according to the survey data.
The weak mood adds to a challenging economic picture. The Federal Reserve raised interest rates in September for the first time in three years, and President Trump’s approval rating has fallen to the lowest of his political career, according to reports.
The consumer gloom arrives with high political stakes: the November 3 midterm elections will decide control of Congress. With Americans this downbeat about their household finances, the economy looks set to dominate the final weeks of campaigning.
