U of Michigan Consumer Sentiment Falls Again

The final University of Michigan confidence index reading for October unexpectedly dropped to 80.9 from the previous estimate of 82. Rising oil prices and the continuing housing slump are being blamed for the index reaching the lowest level since May 2006.

A steady job market and higher wages have supported confidence and spending so far, but the trend is not looking healthy. Future expectations fell from 74.1 to 70.1, indicating that consumers are likely to become more cautious. Current conditions only fell slightly to 97.6 from 97.9.

One year inflation expectations held steady at 3.1%, with five year inflation expectations running at 2.8%.