Preliminary University of Michigan consumer sentiment rose about 6% but remains
roughly 10% below February levels; survey conducted Oct. 20–Nov. 2. Gains
concentrated among independents; confidence improved for low- and middle-wealth
households, while high-wealth households—those with large equity holdings—saw
confidence fall about 5% after recent stock volatility. Respondents increasingly
cite AI bubble concerns, but cost of living is the dominant issue: 57% said high
prices have eroded their living standards, the highest since May and up from 46%
before the Iran conflict in February. One-year inf expectations fell to 4.3%
from 4.7% last month—lowest since August but well above February’s 3.4% and
higher than any 2024 reading. Long-run inf expectations edged down to 3.4% from
3.5%, remaining above the Feb. 2.8–3.2% range. Ahead of the midterms, over
two-thirds expect Democrats to win House control and a majority expect Democrats
to win the Senate.
