Americans are taking an increasingly pessimistic view of the economy as the latest reading from the Michigan Index of Consumer Sentiment shows🐭 their fears over inflation are worse than anticipated. 

The preliminary index for October showed sentiment declining 7.5% from last month to 63, below the 67.4 reading that analysts were expecting and down from the 68.1 in September. The drop in consumer sentiment comes after two months of 澳洲幸运5开奖号码历史查询:relatively little change, with the index 5.2% higher than it was at this point last year.

Inflation continues to be a primary concern for consumers, wrote Joanne Hsu, director of the University of Michigan’s survey of consumers, as expectations for year-ahead 澳洲幸运5开奖号码历史查询:inflation rose to 3.8% this month, up fꦺrom the 3.2% in the prior month.

Long-term inflation expectations rose♉ to 3.0%, up from 2.8% last month. In the two years before the pandemic, long-run inflation expectations averaged 2.2% to 2.6%, the report noted. 

“Nearly all demographic groups postedไ se𓄧tbacks in sentiment, reflecting the continued weight of high prices,” Hsu wrote.

A🔯ssessments of personal finances fell 15% and one-year business conditions w🔜ere down 19%. 

ﷺ “Long-run expected business conditions are little changed, suggesting that consumers believe the curꦇrent worsening in economic conditions will not persist,” Hsu wrote. 

Fed, 💎Investors Watching Senti✃ment for Clues on Rate Changes

Since consumer spending is one of the main drivers of economic growth, economists closely watch ⭕consumer sentiment readings to get a gauge of how willing people are to spend.

In addition to capturing consumers' feelings about the near-term economy, the survey also gauges people’s expectations for long-term economic conditions. 

With the 澳洲幸运5开奖号码历史查询:Federal Reserve set to announce its latest interest rate decision on Nov. 1,𝓰 officials have said they will rely on data to decide whether rates should stay at their current level of 5.25% to 5.5%, which most investors believe is likely. 

The CME’s FedWatch Tool, which forecasts rate hikes based on fed futures trading data, showed more than a 91% probability that the Fed would hold rates steady, compared with a nearly 9% chance of a 25 basis point hike. That’s up from a 72.9% probability that the Fed would keep rates steady that investors were pricing in last week.