U.S. Consumer Confidence Dips to 94.6 in October: Inflation, Shutdown, and Election Jitters Cloud the Outlook

 

American consumers are sending a mixed signal to economists and policymakers this fall. The Conference Board’s Consumer Confidence Index (CCI) edged down to 94.6 in October from a revised 95.6 in September, marking the third straight monthly decline (The Conference Board, 2025a). While the drop was modest and the headline figure beat the Bloomberg median forecast of 93.4, the underlying details reveal a widening gap between how consumers feel today and what they expect tomorrow. For blog readers who follow macro trends, this report is a reminder that sentiment can shift quickly—and that the U.S. economy’s “soft landing” narrative is still fragile. Below, we unpack the numbers, highlight expert commentary, and outline what to watch in the coming months.The Headline Numbers in ContextThe CCI is a diffusion index benchmarked to 100 in 1985. Readings above 100 signal optimism; below 80 have historically preceded recessions. At 94.6, October’s print sits in a middle ground—neither euphoric nor dire—but the trajectory matters.

Component	October 2025	September 2025 (Revised)	Change
Overall CCI	94.6	95.6	–1.0
Present Situation Index	129.3	127.5	+1.8
Expectations Index	71.5	73.4	–1.9

The Conference Board (2025a)

• Present Situation Index (current business and labor conditions): Rose to its highest level since July, buoyed by marginally better views of job availability.
• Expectations Index (six-month outlook for income, business, and jobs): Fell deeper into sub-80 territory, a zone that has flagged every U.S. recession since the 1970s (The Conference Board, 2025b).
  

What Consumers Are Saying—In Their Own WordsThe Conference Board surveys roughly 3,000 households monthly, with an October cutoff of the 19th. Open-ended responses continue to spotlight three dominant themes:

1. Inflation and Prices – Cited by respondents for the third consecutive month as the top concern.
2. Trade Policy and Tariffs – Mentions remained elevated, even after a slight month-over-month dip.
3. Government Shutdown – Now in its second week, the partial closure surfaced as a “key worry” in write-ins, with consumers fretting over delayed paychecks, economic data blackouts, and fiscal gridlock (The Conference Board, 2025a).

These qualitative nuggets align with quantitative gauges. Expected inflation over the next 12 months held steady at 5.2%, down from summer peaks but still double the Federal Reserve’s 2% target (The Conference Board, 2025a).Expert Commentary: A “Sideways” Economy with Yellow FlagsYelena Shulyatyeva, Senior U.S. Economist at The Conference Board, joined Yahoo Finance live on October 28 to dissect the report. She described October as “sideways movement with a slight tilt lower” and emphasized the labor market’s role as a buffer:

“Jobs are still there for now, but the Expectations Index at 71.5 is flashing yellow. When short-term outlooks stay below 80 for multiple months, it’s a reliable leading indicator of weaker spending and hiring six to nine months ahead.” (Shulyatyeva, 2025, as cited in Yahoo Finance, 2025)

Shulyatyeva also noted demographic splits:

• Under-35 cohort: Sharpest confidence erosion, driven by student debt and housing affordability.
• Over-55 cohort: More upbeat, supported by retirement portfolio gains and fixed-income stability.

Stephanie Guichard, the Board’s Senior Economist for Global Indicators, echoed the caution in the official release:

“Consumers are saying ‘spend now, worry later.’ That dynamic can persist for a quarter or two, but it’s not sustainable if labor-market momentum fades.” (Guichard, 2025, as cited in The Conference Board, 2025a)

Cross-checks with the University of Michigan’s sentiment gauge reinforce the picture. Michigan’s preliminary October index sank to 55.0—its lowest since May—largely on gasoline price spikes and election uncertainty (University of Michigan, 2025).Market Reaction and Fed ImplicationsWall Street digested the data with a shrug followed by a wince. S&P 500 futures dipped 0.3% in pre-market trading, while 10-year Treasury yields held near 4.25%. The CME FedWatch Tool still prices a 75% probability of a 25-basis-point cut at the November 6–7 FOMC meeting, but the ongoing government shutdown complicates the Fed’s data-dependent stance (CME Group, 2025).Bloomberg Intelligence economists estimate that a shutdown lasting past mid-November could trim 0.2 percentage points from Q4 GDP via reduced federal spending and delayed economic releases (Hatzius et al., 2025).What to Expect in the Months Ahead

1. November CCI (due November 25) – Will be the first post-election read. Historical swings around presidential votes average ±5 points; a Trump victory could lift tariff-sensitive expectations, while a Harris win might ease shutdown fears.
2. Black Friday & Cyber Monday Data – Early retail sales figures (Thanksgiving weekend) will test whether “spend now” sentiment holds.
3. December Jobs Report (January 10) – A sub-100K payroll print would likely push the Expectations Index below 70, amplifying recession chatter.
4. Inflation Trajectory – Core PCE (the Fed’s preferred gauge) is projected at 2.6% y/y for October. A reacceleration above 2.8% would dim rate-cut odds for December.

Bottom Line for Investors and ConsumersOctober’s 94.6 CCI is not a cliff edge, but it is a caution sign. The U.S. consumer—responsible for roughly 70% of GDP—remains willing to open wallets today yet increasingly anxious about tomorrow. Savvy blog readers should:

• Monitor labor-market diffusion indexes (e.g., quits rate, temp help) for early cracks.
• Watch tariff rhetoric post-election; a 10–20% blanket tariff could add 0.5–1.0% to CPI within 12 months (Furman, 2025).
• Diversify fixed-income exposure; short-dated T-bills offer 4.5%+ yields with minimal duration risk amid Fed pivot uncertainty.

Confidence may be soft, but it is not yet shattered. The next 60 days—spanning an election, a potential shutdown resolution, and holiday spending—will tell us whether October was a speed bump or the start of a sharper turn.