Data released on Friday showed that the University of Michigan Consumer Sentiment Index in the United States unexpectedly fell for the first time in three months, due to consumers' ongoing dissatisfaction with high living costs, which offset the optimistic view of the job market. The preliminary value of the University of Michigan Consumer Sentiment Index for October in the United States was 68.9, with an expected value of 71, and the previous value for September was 70.1. All sub-indices fell compared to September, among which, the current situation index was 62.7, with an expected value of 64, and the previous value for September was 63.3; the expected index was 72.9, with an expected value of 74.8, and the previous value for September was 74.4.

In terms of inflation expectations that the market is highly concerned about, the preliminary value of the University of Michigan's 1-year inflation expectation for October was 2.9%, with an expected value of 2.7%, and the previous value for September was 2.7%. This is the first increase in short-term inflation expectations in the University of Michigan Consumer Survey in five months.

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In terms of long-term inflation expectations, people's preliminary value of 5-year inflation expectations was 3%, with an expected value of 3%, slightly lower than the previous value of 3.1% in September. In the two years before the outbreak of the COVID-19 pandemic, this long-term inflation expectation was between 2.2% and 2.6%.

Although inflation in the United States has cooled down in the past year, people are still uneasy about high prices, and this concern is still at a very high level. They believe that the price increase in the next year will exceed the growth rate of income.

This week, the United States released two major inflation data for September, CPI and PPI. Both the year-on-year and month-on-month increases of CPI and core CPI exceeded expectations. The month-on-month increase of September PPI was the same as last month, and the inflation data was mixed.

The financial blog Zerohedge commented that ordinary consumers can understand the difference between the absolute price level, that is, the actual amount spent every day, and the inflation rate, that is, the rate of change in costs. Of course, the former is the most important for ordinary people.

An indicator measuring consumers' views on current financial conditions fell to its lowest level since the end of 2022. The proportion of consumers expecting an increase in the unemployment rate in the next year fell to 31%, the lowest level in 10 months.

The survey showed that people's views on the purchase conditions of durable goods such as cars and large home appliances rose slightly to a four-month high. In terms of housing purchase conditions, people's concerns about high interest rates fell to the lowest level in 15 months.

Respondents welcomed the Federal Reserve's decision to lower borrowing costs last month. However, the Michigan report pointed out that most people still believe that borrowing costs are too high, indicating that further easing of monetary policy is necessary to promote sales.The survey director of the Michigan Consumer Sentiment Index, Joanne Hsu, stated in a declaration:

Despite a robust labor market, high prices and inflation remain the most pressing concerns for consumers. Consumer confidence influences economic growth in the coming months. Pessimistic consumer sentiment can suppress spending levels and, in turn, affect economic recovery, while optimistic consumer sentiment can contribute to future economic development.