Consumer confidence holds steady from September amid persistent inflation

U.S. consumer sentiment flatlined from September to October, as persistent inflation squeezes Americans’ finances.

Consumer confidence sat at a measure of 48 percent this month, a minor decrease from last month’s reading of 48.1, according to the University of Michigan’s Surveys of Consumers Index .

Consumer sentiment has dipped by 10.4 percent from October 2025, with sentiment regarding present economic conditions declining by 20.3 percent during that time period — from 58.6 percent a year ago to 46.7 this month, per the index.

Annual inflation, as measured by the consumer price index (CPI), ticked up from 3.4 percent in August to 3.7 percent in September .

Energy prices remain a sore spot for the economy amid the Iran war and restricted shipping through the Strait of Hormuz, with gas and diesel prices at more than $4 and $6 per gallon on average, respectively.

The average price of a gallon of regular gas is roughly $4.29 as of Friday, 18 cents lower than a month ago but $1.22 higher than a year ago, according to data from AAA .

Consumer sentiment among Republicans and Democrats increased from September to October, while independents’ view of the economy soured, Joanne Hsu, director of the Surveys of Consumers, said in a release.

“While year-ahead business conditions improved about 14%, they stand 16% less than last October’s read,” Hsu noted.

October’s decline in sentiment toward present economic conditions is due to an 18 percent decrease in “buying conditions for durables,” with Hsu citing higher interest rates and “rising concerns about the affordability of such purchases.”

Federal Reserve officials raised interest rates by a quarter point last month, doing so for the first time in three-plus years in a bid to contain inflation . Annual inflation, according to the CPI , has remained above the Fed’s 2 percent target for five and a half years.

Central bank officials will gather again next week to decide whether to hike rates again. Traders are pricing in an 89.5 percent chance of the Fed holding rates at a range of 3.75 percent to 4 percent, according to the CME FedWatch tool .

Their meeting will come less than a week before the midterm elections , with Democrats looking to pounce on Americans’ worsening outlook of the economy to take control of Congress for President Trump’s remaining two years in office.