Spending keeps rising while US consumer sentiment sits at 48.1

Confidence readings are the weakest in more than a decade even as households buy more, splitting the signal ahead of the holiday quarter.

Assembled by Claude from 9 sources at 7 outlets · Monday, October 5, 2026, Evening edition, 5:35 PM EDT · no human byline

What happened

US consumer sentiment fell to 48.1 in September wublock.substack.com. Economists surveyed for the week ahead expect an October reading of 48.0, against that 48.1 preliminary end-September figure morningstar.com. Consumer confidence has not been this low in more than a decade, according to the experts cited in one survey round-up finance.yahoo.com. The Conference Board's US Consumer Confidence Index fell 6.7 points in September, following earlier declines gjepc.org, and University of Michigan survey work showed sentiment down 15 per cent this year adweek.com.

Spending has not followed the mood down. US consumer spending is rising despite frustrations with persistent inflation and gloomy views about the economy, with outlays up because prices are climbing and because Americans are buying more goods wsj.com. One account of the same data set describes the American consumer as crashing through inflation and driving growth wsj.com.

Why it matters to investors

The divergence has a composition story underneath it. Since May 2025, consumer sentiment has risen for people who own the most stocks while falling for those who own none wsj.com. That splits the aggregate reading into two populations with different balance sheets, and makes a single confidence number a poor guide to where spending comes from wsj.comwublock.substack.com.

It also sets the political backdrop. President Trump's economic data keeps getting stronger while his economic polling keeps getting worse, with the midterms less than a month away and prices the voters' top issue axios.com. The administration's own officials acknowledge that a strong economy alone will not persuade Americans they are better off, an attempt to avoid what they see as a Biden-era mistake of touting data while households feel price pain axios.com.

What to watch

The October sentiment print is the immediate test, with the consensus at 48.0 morningstar.com and the September survey work pointing to energy prices as a channel into confidence wublock.substack.com. A reading that undershoots would widen the gap between the surveys and the spending data morningstar.comwsj.com.

The second test is the holiday season. Retail attention is on Amazon's October Prime Day as the first read on holiday demand adweek.com, and discretionary categories are watching the same question: jewellery buyers describe a holiday test for diamond demand with sentiment still cautious gjepc.org. If spending holds through those events while confidence stays near 48.1, the sentiment surveys will have told investors less than usual wublock.substack.comwsj.com.

Sources

1. axios.com: Trump's economic tightrope messaging of strong economy, high prices (2026-10-05)
2. axios.com: Strong data. Bad vibes. Voters are judging Trump's economy by prices. (2026-10-05)
3. wsj.com: U.S. consumer spending is on the rise despite frustrations with persistent inflation and gloomy views about the economy (2026-10-05)
4. finance.yahoo.com: Consumer confidence hasn't been this low in more than a decade, experts say (2026-10-05)
5. morningstar.com: Trade Gap Expected to Widen — Data Week Ahead Update - Morningstar (2026-10-05)
6. gjepc.org: The Holiday Test for Diamond Demand - Gem and Jewellery Export Promotion Council (2026-10-05)
7. wsj.com: The Mighty American Consumer Is Crashing Through Inflation and Driving Growth - WSJ (2026-10-05)
8. wublock.substack.com: Fed and ECB Minutes Explain September's Rate Hikes as U.S. Price Signals Update (2026-10-05)
9. adweek.com: Amazon's October Prime Day Is the Big Holiday Test for Brands - ADWEEK (2026-10-05)