Consumer confidence soured in October as a government shutdown threatened to weaken a faltering economy beset by a spike in inflation and a sharp slowdown in hiring, new data showed on Friday. The reading marked a decline from the previous month, but was larger than economists expected.
Buyer sentiment has worsened for three straight months, resuming a decline that took hold after President Donald Trump took office. University of Michigan survey the data showed.
At its lowest point this year, consumer confidence fell to near its worst level since a sharp bout of inflation three years ago. The measure remains well below where it was in December, before Trump took office.
Inflation expectations for next year fell from 4.7% in September to 4.6% in October, the data showed. The outcome predicted by respondents would place inflation well above its current level of 2.9%. Long-term inflation expectations remained stable from the previous month, the data showed.
The consumer confidence data is likely to attract more attention than usual as the government shutdown has halted closely watched federal government releases, including monthly employment and inflation reports.
People buy dairy products at a supermarket in Monterey Park, California, on September 9, 2025.
Frederic J. Brown/AFP via Getty Images
Consumer spending, which accounts for about two-thirds of U.S. economic activity, is a key indicator of the outlook for the country’s economy.
A government shutdown typically poses only a modest risk to the economy, but it can cause a sharp drop in consumer confidence, threatening a subsequent drop in consumer spending, some experts previously told ABC News.
Consumer confidence fell more than 7 points between December 2018 and January 2019, coinciding with the most recent 35-day government shutdown, according to a Responsible Federal Budget Committee analysis of data from the University of Michigan survey. Each of the three most recent lockdowns preceding 2018 saw a deterioration in consumer confidence, albeit limited.
The government shutdown, which entered its 10th day on Friday, has shown few signs of resolution. The Senate has rejected competing funding proposals from Democrats and Republicans in seven separate votes.
The closure has coincided with a delicate time for the country’s economy, as a slowdown in hiring fuels recession fears and inflation proves difficult to fully contain.
Federal Reserve Chair Jerome Powell said last month that authorities face a “challenging situation” as they try to guide the economy through a “turbulent period.”
