A record share of Americans expect to be worse off a year from now

From April through June, 41% of Americans told the University of Michigan they expected to be worse off financially a year from now. That's the highest share in the survey's quarterly records, which go back to 1960, according to its data tables. During the 2008 financial crisis, the share peaked at 23%. During the double-digit inflation of 1979 and 1980, it never went above 29%.

It hasn't eased much since. In May, 45% said they expected to be worse off. In September, the latest month with detailed figures, 39% did, while just 16% expected to be better off, the lowest share in the past 13 months of data. Looking five years out, 34% expected to be worse off.

Confidence is at record lows. The survey's Index of Consumer Sentiment, which has run since 1952, was 48.0 in October, essentially unchanged from September, the university reported last week. Before this year, the lowest reading on record was 50.0, in June 2022. This year has broken that five times: April, May, June, September, and October. May set the all-time low at 44.8, according to the survey's historical table.

"Purchasing power continues to dominate consumer views of the economy," said Joanne Hsu, the surveys' director. Sentiment is now 10% below a year ago and 15% below February, "just prior to the Iran conflict," she said. Buying conditions for big-ticket items plunged 18% in October because of higher interest rates and worries about affordability.

Prices are the reason. In September, 55% of people surveyed pointed to higher prices when describing how their finances had changed, up from 45% in January. Americans now expect prices to rise 4.7% over the next year, up from 3.4% in February and higher than any reading in 2024. Their long-run inflation expectations rose to 3.5%, above the 2.8% to 3.2% range of 2024.

The actual numbers back them up. Prices rose 3.6% in September, according to a government inflation measure released October 29, NPR reported. Gas averaged a record $4.33 a gallon in September, 50 cents above the previous September record, and was still $4.22 on October 29, with crude oil above $100 a barrel, AAA said. Health insurance premiums on the ACA marketplaces are going up again in 2027, and the typical monthly mortgage payment is near a record even as home prices level off.

A strong economy that doesn't feel like one. The same day that inflation reading came out, the government reported the economy grew at a 3.4% annual rate from July through September, driven largely by investment in AI and consumer spending. Much of that spending growth comes from higher earners, and much of it reflects higher prices, NPR's personal finance reporter found. Jeannie Kimberly, a retiree in Spokane Valley, Washington, told NPR she was thrilled to get a coupon for a free bag of Oreos. "I never thought I'd be in this position where I would be so excited about a free bag of Oreos, any size," she said.

Who's most pessimistic. On the survey's index of expected finances, where readings below 100 mean more people expect to be worse off than better off, people 65 and older scored lowest by age, at 71 on a three-month average through September. People in the bottom third by income scored 76, against 93 for the top third. The gap by party is wider: Democrats scored 72 and Republicans 117. Independents scored 77, and the country overall 84.

The university releases its preliminary November reading on Friday, November 6, the first since Tuesday's election.

Sources

• University of Michigan Surveys of Consumers: Data tables (Tables 7, 8, and 11)
• University of Michigan Surveys of Consumers: Final results for October 2026
• University of Michigan: Index of Consumer Sentiment, historical monthly data
• NPR: The numbers say the U.S. economy is strong. These Americans aren't feeling it
• AAA: Gas price news, October 2026