Government Shutdown Torpedoes Consumer Sentiment
Surrounded by a sluggish economy and the first government shutdown in 17 years, consumer sentiment dropped to its lowest level since the beginning of the year. According to Thomson Reuters/University of Michigan’s preliminary reading, consumer sentiment fell to 75.2 in October, compared to September’s final reading of 77.5. It was the worst reading since January, when the index was at 73.8.
During the last recession, the index averaged slightly above 64. In the five years before the financial crisis, it averaged almost 90. Consumer sentiment is one of the most popular measures of how Americans rate financial conditions and attitudes about the economy. The University of Michigan’s Consumer Survey Center questions 500 households each month for the index.
The results were worse than expected. On average, economists expected an early reading of about 76 for October. In September, the consumer sentiment index posted its first miss of the year and its second consecutive monthly decline.