Consumer sentiment in the U.S. has unexpectedly deteriorated in the month of October, according to preliminary data released by the University of Michigan on Friday.
The University of Michigan said its consumer sentiment index tumbled to 87.9 in October after climbing to 91.2 in September.
The pullback by the consumer sentiment index came as a surprise to economists, who had expected the index to inch up to 92.0.
With the unexpected decrease, the index fell to its lowest level since last September and the second lowest level in the past two years.
"The early October loss was concentrated among households with incomes below $75,000, whose Index fell to its lowest level since August of 2014," said Richard Curtin, the survey's chief economist.
He added, "In contrast, confidence among upper income households remained unchanged in early October from last month, and more importantly, at a level that was nearly identical to its average in the prior twenty-four months."
The unexpected drop by the headline index came as the index of consumer expectations plunged to 76.6 in October from 82.7 in September, hitting its lowest level in the past two years.
Curtin said the steep drop by the expectations index was likely due to the negative impact of uncertainty surrounding the presidential election, especially among lower income consumers.
Meanwhile, the University of Michigan said the current economic conditions index rose to 105.5 in October from 104.2 in the previous month.
The report also said one-year inflation expectations held at 2.4 percent, while the five-year inflation outlook fell to 2.4 percent in October from 2.6 percent in September.
by RTT Staff Writer
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