Consumer sentiment in the U.S. has deteriorated by much more than anticipated in the month of October, according to preliminary data released by the University of Michigan on Friday.
The University of Michigan said its consumer sentiment index slumped to 63.0 in October from 68.1 in September. Economists had expected the index to edge down to 67.4.
"Assessments of personal finances declined about 15%, primarily on a substantial increase in concerns over inflation, and one-year expected business conditions plunged about 19%," said Surveys of Consumers Director Joanne Hsu.
She added, "However, long-run expected business conditions are little changed, suggesting that consumers believe the current worsening in economic conditions will not persist."
The much steeper than expected drop by the headline index reflected notable decreases in both consumers' assessments of current economic conditions and their expectations.
The current economic conditions index tumbled to 66.7 in October from 71.4 in September, while the index of consumer expectations plunged to 60.7 in October from 66.0 in September.
The report also showed a sharp increase in year-ahead inflation expectations, which jumped to 3.8 percent in October from 3.2 percent in September, reaching the highest level since May.
Long-run inflation expectations also rose to 3.0 percent in October from 2.8 percent in September but remained within the narrow 2.9-3.1 percent range seen for 25 of the last 27 months.
