Uni Michigan consumer sentiment index ticks lower in October

US consumer sentiment unexpectedly deteriorated a little in October, according to a final reading from the University of Michigan.

The consumer sentiment index fell to 98.6 this month from 100.1 in September and 100.7 in October 2017. It was also down from the preliminary reading of 99.0.

Meanwhile, the index of current economic conditions declined to 113.1 in October from 115.2 last month and 116.5 in October of last year.

The index of consumer expectations nudged down to 89.3 from 90.5 last month and last October.

Surveys of Consumers chief economist Richard Curtin said: "The consumer sentiment Index has been higher thus far in 2018 (98.5) than in any prior year since 2000, which was the last year of the longest expansion since the mid-1800s. Importantly, stock price declines, rising inflation and interest rates, and the negative mid-term election campaigns, have not acted to undermine consumer confidence. Needless to say, consumers are not immune to these negative factors.

"The data only indicate that the tipping point toward escalating pessimism has not been reached. This resilience was primarily due to the prevailing belief that the economy would produce robust job growth during the year ahead, even if overall wage growth remained dismal. Consumers now place a higher value on job security compared with wage growth due to job losses in the Great Recession as well as the ageing of the labour force."

Curtin said the pace of growth in real personal consumption can be expected to average 2.6% late this year and into the first half of next year.

"Increases in home and vehicle prices, rising interest rates, and decreases in the pace of growth in inflation-adjusted incomes have especially dimmed prospects for home and vehicle sales," he said.