US consumer sentiment stable in October, labor market worries remain

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WASHINGTON (Reuters) -U.S. consumer sentiment was steady in October, with households appearing to shrug off a partial shutdown of the government, though worries about the labor market and inflation lingered.

The University of Michigan’s Surveys of Consumers on Friday said its Consumer Sentiment Index was little changed at 55.0 this month from a final reading of 55.1 in September. Economists polled by Reuters had expected the index to slip to 54.2.

“Overall, consumers perceive very few changes in the outlook for the economy from last month. Pocketbook issues like high prices and weakening job prospects remain at the forefront of consumers’ minds,” Joanne Hsu, the director of the Surveys of Consumers, said in a statement.

“At this time, consumers do not expect meaningful improvement in these factors. Meanwhile, interviews reveal little evidence that the ongoing federal government shutdown has moved consumers’ views of the economy thus far.”

The government shutdown, now in its second week, has disrupted public services, delayed flights and sent home hundreds of thousands of federal workers home, with spillover effects to contractors, thousands of whom have been furloughed.

It has also caused the suspension of official economic data collection and publication, impacting the closely watched monthly employment report, which was not released last Friday.

The survey’s measure of consumer expectations for inflation over the next year fell to a still-high 4.6% this month from 4.7% in September. Consumers’ expectation for inflation over the next five years were unchanged at 3.7%.

(Reporting by Lucia Mutikani, Editing by Nick Zieminski)