Americans are taking an increasingly pessimistic view of the economy as the latest reading from the Michigan Index of Consumer Sentiment shows their fears ꦆover 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官方开奖结果体彩网: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官方开奖结果体彩网:inflation rose to 3.8% this month, up from 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 pand𝓀emic, long-run 🧜inflation expectations averaged 2.2% to 2.6%, the report noted. 

“Nearly all demographܫic groups posted setbacks in sentiment, reflecting the continued weight of high prices,” Hsu wrot𝕴e.

Assessments of🎶 personal finances fell 15% and one-year busine༒ss conditions were down 19%. 

“Long-run expected business conditions are little changed, suggest🅠ing that consumers believe the current worsening in economic conditions will not persist,” Hsu wr🍌ote. 

Fed, Investors Watching Sentiment fဣor Clues o൩n 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官方开奖结果体彩网:Federal Reserve set to announce its latest interest rate decision on Nov. 1, 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 be🌜lieve 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.