The University of Michigan’s consumer sentiment index fell to 46.3 in early October 2026, according to the preliminary estimate, its lowest level since May’s record low and well below market expectations of 47.6. While year-ahead expectations for personal finances and business conditions edged up slightly, buying conditions for durable goods deteriorated sharply amid elevated prices and borrowing costs. Lower-income consumers and households with smaller stock portfolios recorded particularly steep declines, reflecting their limited capacity to absorb further price increases. Frustration over the cost of living continues to mount, with consumers across the political spectrum increasingly perceiving a deterioration in the economic outlook since the beginning of the year. Meanwhile, inflation expectations edged higher, with year-ahead expectations rising to 4.7% from 4.6% in September, while long-run inflation expectations increased to 3.5% from 3.4%.