American consumer confidence has sunk into extremely pessimistic territory, falling to levels not seen since the economic recession.

Consumer confidence in the United States continued to decline in October, remaining at a five-month low. The final value of the University of Michigan Consumer Confidence Index in October was 53.6, a decrease of 1.5 points from September, lower than the market expectation of 55, and a significant decrease of 24% compared to the same period last year. The current level of the index is 36.4% lower than the average since 1978, highlighting extremely low sentiment. Joanne Hsu, director of the University of Michigan survey responsible for the investigation, stated that overall confidence did not change much this month, with a slight increase in confidence among young consumers, but a significant decline among middle-aged and older groups. Personal financial conditions have slightly improved, but expectations for future finances have weakened. She pointed out that consumers generally do not see a significant improvement in overall economic conditions compared to last month, and inflation and high prices remain overwhelming sources of pressure. It is worth noting that, despite the ongoing federal government shutdown in the United States, only about 2% of respondents actively mentioned the potential impact of the shutdown on the economy, much lower than the 10% during the shutdown in 2019. Historically, the current index level is lower than the levels corresponding to the start of the last six U.S. economic recessions, indicating that consumer sentiment is currently in a typical pessimistic range before a recession. In October, the Consumer Current Conditions Index (CECI) fell for the fourth consecutive month to 58.6, reaching a three-year low, a decrease of 3.0% month-on-month and a sharp decline of 9.7% year-on-year, weaker than the market forecast of 61. The Consumer Expectations Index (CEI) also fell for the fourth consecutive month, reaching 50.3, the lowest since May, with a decline of 2.7% month-on-month and a significant contraction of 32.1% year-on-year, also lower than the market expectation of 51.2. The one-year inflation expectation fell from 4.7% to 4.6%. The long-term inflation expectation increased from 3.7% to 3.9%, still lower than the peak in April. The increase in long-term inflation expectations this month mainly comes from Republicans and independent voters. Uncertainty about inflation, in the short and long term, is on the rise, indicating that consumers lack confidence anchors in the inflation trajectory. Overall, consumer confidence continues to be under pressure in an environment of high inflation, sticky prices, and policy uncertainty. Current and future sentiment is weakening simultaneously, with the index falling to a typical recession range, making the signals of economic softening more apparent.