US Consumer Confidence Split Over the Present as Two October Surveys Disagree
The Conference Board's rebound and Michigan's near-record low were fielded in the same weeks. The gap is in what each survey asks about today, and both agree on what households will buy next.
On Friday, October 23, the University of Michigan put sentiment at 48.0, the second-lowest final reading in the survey’s history. Four days later, the Conference Board put confidence at 91.7, up 7.5 points from September’s revised 84.2 and far above the 81 economists had expected.
Their scales differ. The Conference Board’s index is set to 100 in 1985; Michigan’s is set to 100 in 1966. Their headline levels cannot be set against each other, and this article does not do that. What can be compared is direction, and the directions split in exactly one place. Both surveys’ expectations series rose in October. Only the present-tense series moved in opposite directions. The Board’s field ran October 1 to 21, and Michigan’s ran September 22 to October 19.
The Conference Board’s Present Situation Index rose 8.6 points to 120.4. Respondents calling business conditions good rose to 21.4% from 18.8%, while those calling them bad fell to 17.8% from 20.0%, leaving net views of current business conditions at 3.6% after a negative reading in September. On jobs, 26.7% called jobs plentiful, up from 24.3%, and 21.4% called jobs hard to get, unchanged, for a labor-market differential of 5.3%. Fergus McCormick, senior economist for global indicators at the Conference Board, tied the rebound to fuel: “The recovery was in line with retail gasoline prices easing from September to October.”
Michigan’s Current Economic Conditions Index fell to 46.7 from 50.9 in September, and from 58.6 a year earlier. Joanne Hsu, director of the University of Michigan’s Surveys of Consumers, gave the fall a single cause: buying conditions for durable goods plunged 18% on higher interest rates and worries about affordability, and that drop accounted for the whole decline in current conditions. “Purchasing power continues to dominate consumer views of the economy,” Hsu said. Sentiment overall slipped just 0.1 point to 48.0 from 48.1, down 10.4% from a year earlier and 15% below February, before the Iran conflict began.
The questionnaires ask different questions. The Conference Board’s present-tense questions ask about business conditions and job availability. Michigan’s current-conditions questions ask, among other things, whether now is a good time to buy a durable good. A household can answer yes to the first set and no to the second without contradicting itself. Jobs look plentiful at 26.7%. A washing machine bought on credit at current rates still looks unaffordable. The surveys are not measuring two different economies. They are measuring two different todays.
The Conference Board’s Expectations Index recovered 6.9 points to 72.6, only partly reversing three consecutive monthly declines, with net expectations for business conditions at negative 3.0%, for the labor market at negative 11.1%, and for household income at positive 6.7%. Michigan’s Index of Consumer Expectations rose to 48.8 from 46.3, helped by a 14% monthly improvement in year-ahead business conditions that still left that measure 16% below last October. The Conference Board’s 72.6 also sits below 80, the level the Board has flagged as historically signalling a recession within the next year, where it has now sat since February 2025. That line has spent long stretches below 80 since the pandemic without a recession following, so it reads as a warning rather than a verdict, and it is one the October rebound did not clear.
The Conference Board said consumers planned less spending on services and durable goods over the next six months, and McCormick put the reason plainly: higher price levels and persistent inflation had eroded purchasing power. Durable-goods purchase plans fell across the board. Expected purchases of smartphones, personal computers, laptops and tablets pulled back by more than 1%, and plans to buy autos and homes declined slightly on a six-month moving-average basis. Expected spending on services was generally lower except for movies, theater, live entertainment and sporting events. Vacation plans dipped to 43.3% from an upwardly revised 44.2% in September, with more domestic trips and fewer visits to foreign countries planned. “The mood among consumers remains pretty bleak,” Samuel Tombs, chief US economist at Pantheon Macroeconomics, said in a note. “The recovery in the headline index to its highest level since June comes as a surprise, given the still-high level of gas prices, stalling stock price appreciation and the lackluster labor market.”
The Conference Board’s improvement reached only some households. On a six-month moving-average basis, only consumers under 35 and households with incomes of $100,000 or more gained confidence in October. Confidence among Gen X, Baby Boomers and the Silent Generation continued to trail Gen Z and Millennials by a wide margin. The divide widened over two years. The Conference Board reported improvement across all political affiliations, much more so for Republicans. Michigan’s partisan detail points the other way for one group: sentiment among independents fell to 42.4 from 47.7, a third consecutive monthly decline, while readings among Democrats and Republicans improved.
Michigan’s survey found 85% of consumers view now as a bad time to buy a house, with about 62% blaming high interest rates, up from 47%. Around 69% expect interest rates to rise over the coming year, the highest share since April 2023. The proportion spontaneously citing high prices as hurting their finances climbed to 56% from 45% in January. Gasoline was mentioned unprompted by more than 40% of those surveyed. The Federal Reserve raised interest rates in September, and its officials track inflation expectations closely because they believe such sentiments can become self-fulfilling.
AAA’s national average fell from $4.47 to $4.26 in the past month, a 4.7% decline, according to CFO Dive. ABC News put gasoline roughly 43% above where it stood when the Iran war began in late February. The Conference Board’s respondents still expected 5.8% inflation over the next 12 months, down slightly but elevated, while Michigan’s respondents put year-ahead inflation expectations at 4.7%, up from 4.6%, and five-year expectations at 3.5%, up from 3.4%, both the highest since May. The gap is 1.1 points. In the Conference Board’s write-in responses, references to prices, the high cost of food and groceries, and oil and diesel prices rose in October, while comments about war and conflict eased for a second straight month but remained elevated. September’s consumer price index rose at a 3.7% annual rate, with core prices up 2.6% from a year earlier against 2.4% in August, according to the Bureau of Labor Statistics figures cited by CFO Dive.
Michigan’s preliminary October reading was 46.3; the final reading revised it up to 48.0. September’s Conference Board reading had first been reported at 81.9 and was revised to 84.2.
