U.S. consumer sentiment fell unexpectedly in early October to its lowest level in 13 years, as high gasoline prices and the fallout from hurricane damage continued to take their toll, a report showed Friday.
The University of Michigan’s preliminary October index of consumer sentiment fell to 75.4, according to sources who saw the subscription-only report. That was below a final September reading of 76.9 and much below Wall Street’s median forecast of an increase to 80.0.
“We were anticipating that we could see a little bit of an improvement in October because the rebuilding after the hurricanes appears to have started and energy prices have stabilized, but it appears that it will take a little longer for consumers to feel better about things,” said Gary Thayer, chief economist at A.G. Edwards and Sons in St. Louis, Missouri.
The survey’s expectations component eased to 62.4 from 63.3, also defying Wall Street forecasts for an increase to 67.0. The early October expectations reading was the lowest since March 1992.
The index of current conditions fell to 95.7 in early October from 98.1 in September. That also went against Wall Street forecasts for a slight rise to 99.5.
Confidence measures are used as an indicator of consumer spending, which makes up about two-thirds of overall U.S. economic activity. Consumer spending in turn is seen as an indication of strength or weakness in economic growth.