U.S. Consumer Resilience Amid Government Shutdown: Sentiment Holds Steady
U.S. consumer sentiment remained steady in October despite a government shutdown. The University of Michigan's survey highlighted concerns about inflation and job prospects. While Democrats showed declining sentiment, Republicans and independents were optimistic. Economic data collection was halted, affecting reports on employment and inflation forecasts.
In October, U.S. consumer sentiment showed resilience despite a government shutdown affecting various public services. The University of Michigan's Surveys of Consumers reported a stable Consumer Sentiment Index, with ongoing concerns about inflation and labor market conditions persisting. Economist Christopher Rupkey noted that, "consumers have not turned their back on the economy yet."
The shutdown's impact was felt across airlines and federal services, impacting contractors and causing a data blackout on employment figures. Sentiment was split along political lines, with Democrats expressing more concern, while Republicans and independents remained positive. Analysts suggest sentiment may worsen if the shutdown continues.
Economic challenges, including a softened labor market and high inflation expectations, loom large. The Fed is expected to cut interest rates further in October to support the labor market. Experts caution that consumer spending could remain solid due to stock market gains, despite inflation concerns dampening consumer confidence.
(With inputs from agencies.)
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