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US consumer sentiment unexpectedly fell for the first time in three months as lingering frustration with a high cost of living offset more sanguine views of the job market.<\/p>\n
The preliminary October sentiment index declined to 68.9 from 70.1 in September, according to the University of Michigan. The median estimate in a Bloomberg survey of economists called for a reading of 71.<\/p>\n
Consumers expect prices will climb 2.9% over the next year, up from the 2.7% expected in September and the first increase in five months, the report issued Friday showed. At the same time, they see costs rising 3% over the next five to 10 years, down from 3.1% in the prior month.<\/p>\n
While the rate of inflation has cooled over the past year, households remain troubled by high prices that they also see outpacing their income gains in the year ahead. A measure of consumers\u2019 perception of their current financial situation dropped to the lowest level since the end of 2022.<\/p>\n
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The share of consumers who expect unemployment to rise in the coming year fell to 31%, the lowest reading in 10 months.<\/p>\n
\u201cDespite strong labor markets, high prices and inflation remain at the top of consumers\u2019 minds,\u201d Joanne Hsu, director of the survey, said in a statement.<\/p>\n
Separate figures Friday showed no change in a gauge of prices paid to producers in September, suggesting further progress toward tamer inflation.<\/p>\n
Still, respondents welcomed the Federal Reserve\u2019s decision last month to start lowering borrowing costs. Their views of buying conditions for durable goods such as cars and major appliances edged up to a four-month high.<\/p>\n
Looking at homebuying conditions, concerns about high interest rates fell to the lowest in 15 months. But a majority still sees borrowing costs as too high, suggesting further easing is necessary for bolster sales, the report said.<\/p>\n
The current conditions gauge slipped to 62.7 from 63.3. A measure of expectations fell to 72.9 this month from 74.4 in September.<\/p>\n<\/div>\n<\/div>\n