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U.S. Consumer Confidence Largely Unchanged in Early October

Consumer sentiment in the U.S. stalled in early October as consumers became more concerned about their current economic conditions, results from a University of Michigan survey showed Friday.

The preliminary estimate of the index of consumer sentiment stood at 81.2 in October compared with an 80.4 reading in September. Economists surveyed by The Wall Street Journal had expected the indicator to come in at 80.5.

October’s slight uptick marks the third straight month gain for consumer confidence, but also shows American consumers are far from recovering pre-pandemic optimism levels. The indicator stands 15% below the figure registered the same month a year earlier.

Consumers’ assessment of the current economic conditions decreased to 84.9 in October from 87.8 in September.

Slowing employment growth, the resurgence in Covid-19 infections, and the absence of additional federal relief payments prompted consumers to become less optimistic about their current economic conditions, said Richard Curtin, the survey’s chief economist.

Those concerns, however, were largely offset by continued small gains in economic prospects for the year ahead, he said.

The index of consumer expectations–which reflects the balance of respondents anticipating improved business conditions in the next six months–rose to 78.8 from 75.6 the prior month. The index, despite the recent gain, is still down by 14.4% from its February peak.

The inflation expectations components moved in mixed directions compared with the previous month, with consumers expecting prices to increase 2.7% next year, up from 2.6% in September, and 2.4% over the next five years, down from 2.7% a month earlier.

The survey was conducted between Sept. 30 and Oct. 14. The final reading for the month will be published on Oct. 30.
Source: Dow Jones

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