Consumer Sentiment Reaches 5-Month Low as Inflation Outlook Hits Highest Since May

12:39 PM EDT, 10/23/2026 (MT Newswires) -- US consumer sentiment hit its lowest level in five months in October as inflation expectations hit the highest since May, final results of a University of Michigan survey showed Friday. The main sentiment index fell 0.2% sequentially to 48 this month, but was higher than the preliminary reading of 46.3, according to the survey. The latest print marks the lowest since May. "Sentiment is now 10% below a year ago and 15% less than February, just prior to the Iran conflict," Surveys of Consumers Director Joanne Hsu said. Year-ahead inflation expectations ticked up to 4.7% in October from 4.6% last month, while the five-year price growth forecast rose to 3.5% from 3.4%. "Inflation expectations over both time horizons increased for the second straight month to their highest readings since May," Hsu said. The gauge for current economic conditions dropped to 46.7 this month from 50.9 in September, while the index of consumer expectations rose 5.4% to 48.8, the survey showed. "This month's decline in the current conditions sub-index was driven entirely by buying conditions for durables, which plunged 18% on the basis of higher interest rates and rising concerns about the affordability of such purchases," Hsu said. "Purchasing power continues to dominate consumer views of the economy." Last week, official data showed consumer prices in the US accelerated in September amid a surge in gasoline prices. A separate report showed that retail sales increased more than expected last month as outlays at gas stations rose amid elevated fuel prices. US retail gasoline prices averaged $4.2926 per gallon Friday, compared with $3.0713 a year ago, according to data from AAA, a motoring and leisure travel membership organization that tracks fuel prices in the US. Markets are pricing in a roughly 90% probability that the Federal Reserve will keep its benchmark lending rate unchanged next week, according to the CME FedWatch tool. The remaining odds point to a second consecutive increase of 25 basis points as the central banks looks to curb inflation.