As the federal government shutdown stretches into its 10th day, the usual stream of economic data has been interrupted, leaving analysts and policymakers without their usual metrics.
Despite this, the University of Michigan’s Surveys of Consumers continues to provide critical insights, unaffected by the political deadlock. On October 10, 2025, the preliminary consumer sentiment report was released, with the final data set to follow in two weeks.
Joanne Hsu, director of the Surveys of Consumers, provided insights on the latest findings, discussing the mood of Americans amid the ongoing shutdown.
Understanding Consumer Sentiment
The University of Michigan has been tracking consumer sentiment since 1946, assessing American perceptions of the economy’s current and future states through questions on personal finances, business conditions, and purchasing readiness for significant items.
This sentiment is a leading indicator, guiding policymakers, business leaders, and investors. A dip in consumer sentiment typically signals reduced spending, potentially slowing economic growth, while an increase suggests economic expansion.
Survey Methodology
Each month, around 1,000 individuals from various demographics across the U.S. are surveyed. Participants are asked approximately 50 questions regarding economic conditions, personal finances, employment prospects, and inflation expectations, providing a comprehensive overview of economic health.
Current Findings
The latest report indicates stability in consumer sentiment from September to October, with no significant change. While optimism is low, it has not further declined. High prices, inflation, and potential labor market weaknesses weigh on sentiment.
Notably, sentiment improved earlier for wealthier consumers post-tariff announcements by the Trump administration, but has stagnated for lower-income groups, especially those without stock investments.
There is a slight reduction in inflation expectations this month, though they remain elevated compared to levels from the previous year.
Impact of the Government Shutdown
While the survey was conducted during the shutdown’s initial phase (Sept. 23-Oct. 6), there has been no discernable impact on consumer sentiment. Historical data suggests shutdowns can affect sentiment, evidenced in 2019 when 10% mentioned the shutdown in surveys, leading to a temporary dip in sentiment.
Shutdowns linked to debt ceiling crises, like in 2013, often result in sharper sentiment declines due to increased financial uncertainty. The current sentiment’s trajectory will depend on the shutdown’s duration and its perceived effects on economic factors such as prices and employment opportunities.
