WASHINGTON — U.S. consumer sentiment fell for the third straight month in early October, sinking near its record low as households reported mounting frustration over the cost of living, according to the University of Michigan’s closely watched survey.
The preliminary Consumer Sentiment Index dropped to 46.3 from 48.1 in September, near the record low set in May and below the 47.8 reading economists polled by Reuters had expected. Reuters reported the decline was driven by rising cost of living tied to the Middle East conflict, which pushed energy prices higher and prompted the Federal Reserve to raise interest rates in September for the first time in three years.
The sharpest declines came among lower-income consumers, those with smaller stock portfolios and political independents, the survey found. “Frustration over cost-of-living continues to mount,” survey director Joanne Hsu said.
Year-ahead inflation expectations rose to 4.7% from 4.6%, while long-run expectations ticked up to 3.5% from 3.4%, the survey showed.
The bleak reading lands with less than a month until the Nov. 3 midterms, which will decide control of Congress — and with the economy shaping up as the defining issue of the campaign.
