The University of Michigan’s consumer sentiment index was revised higher to 48.0 in late October 2026, up from a preliminary estimate of 46.3, but remained at its lowest level in five months. Gains in sentiment among Republicans and Democrats were offset by declines among independents. Year-ahead business conditions improved by around 14%, although the index remained 16% below its level in October 2025. Meanwhile, the decline in the Current Conditions subindex was driven entirely by buying conditions for durable goods, which plunged 18% amid higher interest rates and growing concerns about affordability. Purchasing power continues to dominate consumer views of the economy, with sentiment now 10% below its year-ago level and 15% below February, just before the Iran conflict. Year-ahead inflation expectations edged up to 4.7% from 4.6% in September, while long-run inflation expectations also increased, rising to 3.5% from 3.4%.