The present feels worse than the future, which is the oil market's mood too

The University of Michigan’s preliminary October survey put consumer sentiment at 46.3, down from 48.1 in September and 53.6 a year ago¹. That headline hides a split worth naming.

Current economic conditions fell 12.2% in a month, to 44.7. Consumer expectations rose 2.2%, to 47.3¹. People rate today worse and the months ahead slightly better. It is the same shape as this week’s oil market: an expensive present and a hoped-for calmer future.

The survey’s director, Joanne Hsu, said buying conditions for durable goods “plummeted amid high prices and borrowing costs”, and that sentiment fell steeply among lower-income consumers and those with smaller stock portfolios, the groups with fewer resources to absorb price rises¹.

The figure committees will read twice is inflation expectations: 4.7% for the year ahead and 3.5% for the long run, both the highest since May¹. Expectations are a behaviour, not a feeling. People who expect prices to rise ask for raises and buy early, which is why central banks guard this number more carefully than any podium line. The constructive read: the long-run number rose by a tenth of a point in a month, from 3.4% to 3.5%¹, not by a full point. The public is pricing a shock, and not yet a spiral. That is a sensible public.