US Consumer Sentiment Sits Near Record Low Before Midterms

US consumer sentiment is sitting near the lowest level in the history of the survey, and it is landing right as millions of Americans are already voting in the midterms. The University of Michigan's final October reading came in at forty-eight, a hair under September and the second-worst number ever recorded, according to Reuters.

That is the headline, but the details underneath explain why so many people feel stuck. Prices are high, borrowing is costly, and the people who respond to this survey do not expect either problem to ease soon. For anyone trying to save for a first apartment, a used car or a down payment, the mood is not abstract at all.

What the new consumer sentiment number says

The University of Michigan Surveys of Consumers reported that its index slipped from forty-eight point one in September to forty-eight point zero in October. Economists polled by Reuters had expected a weaker figure, so the final result actually beat forecasts, even though it remains painfully low. The only worse reading on record was set in May, shortly after the Iran war began.

Compared with a year ago, the index is down about ten percent. It is also about fifteen percent below where it stood in February, just before the Iran conflict started, according to the University of Michigan. Survey director Joanne Hsu summed it up this way: "Purchasing power continues to dominate consumer views of the economy."

Looking inside the consumer sentiment index shows a split. The measure of current conditions fell sharply, while the measure of expectations for the months ahead rose a little. In other words, people feel worse about what is happening right now, yet they are slightly less gloomy about what comes next.

Why big purchases feel out of reach

The drop in current conditions was driven entirely by one thing: buying conditions for durable goods, which plunged about eighteen percent. Hsu pointed to higher interest rates and growing worries about whether those purchases are affordable at all.

The housing numbers are rough. About eighty-five percent of consumers said it is a bad time to buy a house, and roughly sixty-two percent of them blamed high interest rates, up from about forty-seven percent last month. Car shoppers feel it too, with interest rate complaints about autos rising from eighteen percent to twenty-four percent.

Looking ahead, around sixty-nine percent of consumers expect rates to climb over the next year, the highest share since April two thousand twenty-three. That suggests many households think things will get tougher before they get easier, which is a big deal for younger buyers hoping to get into the market.

Inflation worries keep climbing

Price pain is the other half of the story. The share of people who spontaneously said high prices are dragging down their personal finances rose for the fourth month in a row, reaching fifty-six percent, up from forty-five percent in January. Gasoline remains a top complaint, mentioned without prompting by more than forty percent of respondents.

Households also expect more of the same. Year-ahead inflation expectations ticked up to four point seven percent from four point six percent, and the longer-run expectation rose to three point five percent. Twelve-month expectations were just three point four percent in February before the war with Iran started.

Hsu warned in an accompanying report that the persistence of elevated expectations poses a risk for Federal Reserve policymakers trying to return inflation to their two percent target. "Consumers broadly expect inflation to accelerate, and this year's increases in inflation expectations are not limited to one part of the political spectrum," she wrote.

The political twist before November third

This is where the economy meets the ballot box. Reuters reported that sentiment among independent voters, a key swing bloc, dropped to forty-two point four from forty-seven point seven in September. Scores for Democrats and Republicans both improved a bit, so independents pulled the overall number down.

The shift in who feels squeezed is striking. Since January, the number of independents citing high prices as a hit to their finances rose by twenty-seven percent, while it jumped by fifty-two percent among Republicans and fifteen percent among Democrats. People with little or no stock market exposure also report more price stress, even as the AI-fueled market boom lifted wealthier households.

Polls show Republicans are likely to lose the House and possibly the Senate, with President Donald Trump's approval sitting at a record low in a Reuters/Ipsos poll, partly because of fuel prices after the decision to strike Iran. For more on the race, see the politics section and the world desk.

What to watch next

The next big checkpoint for consumer sentiment and rates arrives next week, when Federal Reserve officials meet in Washington. They are broadly expected to leave the policy rate at three point seven five to four percent, after raising it by a quarter point in September. Most officials have signaled that higher rates may be needed, though key leaders say they would like more data first.

There is one more wrinkle. Spending has stayed surprisingly resilient even though people feel terrible about the economy. Hsu suggested some of that could be precautionary buying to beat future price hikes, which would make it even harder to cool inflation.

For now, consumer sentiment is telling a simple story: people are tired of paying more for everything, and they do not expect relief any time soon. Whether that frustration shows up in the voting booth on November third is the question everyone in Washington is quietly asking.