U.S. Consumer Sentiment Drops More Than Initially Estimated In October

Consumer sentiment in the U.S. deteriorated by slightly more than initially estimated in the month of October, the University of Michigan revealed in a report released on Friday.

The report said the consumer sentiment index for October was downwardly revised to 98.6 from the preliminary reading of 99.0.

Economists had expected the consumer sentiment index to be unrevised at 99.0, which was still down from 100.1 in September.

Despite the monthly decrease, Surveys of Consumers chief economist Richard Curtin noted the index has averaged 98.5 thus far in 2008, the highest since 2000, which was the last year of the longest expansion since the mid-1800s.

"Importantly, stock price declines, rising inflation and interest rates, and the negative mid-term election campaigns, have not acted to undermine consumer confidence," Curtin said.

"Needless to say, consumers are not immune to these negative factors," he added. "The data only indicate that the tipping point toward escalating pessimism has not been reached."

The unexpected downward revision to the headline index came as the current economic conditions index for October was downwardly revised to 113.1 from 114.4. The index is down from 115.2 in September.

The index of consumer expectations for October was upwardly revised to 89.3 from 89.1 but is still below the September reading of 90.5.

On the inflation front, one-year inflation expectations rose to 2.9 percent in October from 2.7 percent in September, while five-year inflation expectations edged down to 2.4 percent from 2.5 percent.