US consumer sentiment slides as shutdown standoff darkens outlook
The ongoing government shutdown in the United States is weighing heavily on consumer sentiment, as it saw a slight decline to 55, from 55.1 in September, the University of Michigan’s Consumer Sentiment Index for October 2025 said.
The consumer sentiment data comes as a crucial economic indicator amid delays in other data sets due to the government shutdown.
The decline in sentiment displays a subdued and low level of confidence among Americans about the economy as political uncertainty persists.
Confidence index falls amid political turmoil
The University of Michigan’s Consumer Sentiment Index, a key measure of how confident people feel about the economy, barely budged this month.
It is holding steady, but at pretty low levels, roughly where it was earlier this year.
The index slipped just a bit to 55, which basically means consumers aren’t feeling any worse, but they’re not feeling much better either.
The main culprits behind the subdued sentiment are worries around inflation and job growth.
The prices in the United States are running high, with consumers expecting inflation to stay around 4.6% over the next year.
And when it comes to jobs, most people don’t think the employment picture is going to improve anytime soon.
To add some optimism to the picture, we have a better public outlook on current finances, as people are finding big-ticket items like appliances or cars are a bit more affordable than before.
But overall, expectations for the future have dimmed. Many are bracing for tougher times ahead, which keeps the overall mood cautious and subdued.
The economist simply blame the ongoing government shutdown for the chaos and emphasised that as parts of the government remain at a standstill, people will get more worried about everything from delayed services to missed paydays.
It must be noted that the consumer sentiment numbers are not as bad as expected, but people are anxious about job security and stubbornly high inflation, and that mix is keeping confidence on edge.
Economic uncertainty clouds outlook for households and markets
The political standoff between the White House and Congress has started displaying the economic consequences as more than 250,000 federal workers have missed paychecks so far.
Economists estimate that every week the government stays closed shaves about 0.1 to 0.2 percentage points off US GDP growth, a hit that adds up fast.
On top of that, the pause in key federal reports, like jobs data, retail sales, and GDP numbers, is leaving markets in the dark.
Without those updates, it’s harder for investors and even the Federal Reserve to get a clear read on the economy or decide what to do with interest rates.
For now, stocks have held up reasonably well, but there’s been a noticeable shift toward safer assets: treasury yields have dipped slightly as investors play it cautious.
If the shutdown stretches on, economists warn that job risks could climb, with potential layoffs putting more pressure on an already fragile labor market.
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US consumer sentiment slides as shutdown standoff darkens outlook
The ongoing government shutdown in the United States is weighing heavily on consumer sentiment, as it saw a slight decline to 55, from 55.1 in September, the University of Michigan’s Consumer Sentiment Index for October 2025 said.
The consumer sentiment data comes as a crucial economic indicator amid delays in other data sets due to the government shutdown.
The decline in sentiment displays a subdued and low level of confidence among Americans about the economy as political uncertainty persists.
Confidence index falls amid political turmoil
The University of Michigan’s Consumer Sentiment Index, a key measure of how confident people feel about the economy, barely budged this month.
It is holding steady, but at pretty low levels, roughly where it was earlier this year.
The index slipped just a bit to 55, which basically means consumers aren’t feeling any worse, but they’re not feeling much better either.
The main culprits behind the subdued sentiment are worries around inflation and job growth.
The prices in the United States are running high, with consumers expecting inflation to stay around 4.6% over the next year.
And when it comes to jobs, most people don’t think the employment picture is going to improve anytime soon.
To add some optimism to the picture, we have a better public outlook on current finances, as people are finding big-ticket items like appliances or cars are a bit more affordable than before.
But overall, expectations for the future have dimmed. Many are bracing for tougher times ahead, which keeps the overall mood cautious and subdued.
The economist simply blame the ongoing government shutdown for the chaos and emphasised that as parts of the government remain at a standstill, people will get more worried about everything from delayed services to missed paydays.
It must be noted that the consumer sentiment numbers are not as bad as expected, but people are anxious about job security and stubbornly high inflation, and that mix is keeping confidence on edge.
Economic uncertainty clouds outlook for households and markets
The political standoff between the White House and Congress has started displaying the economic consequences as more than 250,000 federal workers have missed paychecks so far.
Economists estimate that every week the government stays closed shaves about 0.1 to 0.2 percentage points off US GDP growth, a hit that adds up fast.
On top of that, the pause in key federal reports, like jobs data, retail sales, and GDP numbers, is leaving markets in the dark.
Without those updates, it’s harder for investors and even the Federal Reserve to get a clear read on the economy or decide what to do with interest rates.
For now, stocks have held up reasonably well, but there’s been a noticeable shift toward safer assets: treasury yields have dipped slightly as investors play it cautious.
If the shutdown stretches on, economists warn that job risks could climb, with potential layoffs putting more pressure on an already fragile labor market.
The post US consumer sentiment slides as shutdown standoff darkens outlook appeared first on Invezz
Read More