Consumer Sentiment Near Record Low: What Founders Should Do

Shoppers sound gloomier than they have in months. A CFO Brew report on the University of Michigan’s preliminary October survey puts consumer sentiment at 46.3, down from 48.1 in September. That sits just above the record low of 44.8, set in May.

If you sell to consumers, this number deserves a spot in your next planning meeting. Even though the latest small business index shows owners feeling healthier, their customers sound far less upbeat. Mood shapes how people react to price changes, financing offers, and big purchases.

What the October Reading Shows

The preliminary survey ran from September 22 to October 5. If the final October figure holds near this level, the Wall Street Journal says it would become the second-lowest reading ever recorded. Joanne Hsu, who directs the survey, pointed to growing irritation with living costs.

There was one small bright spot. Looking one year out, consumers felt a bit better about their own finances and the wider business climate. Meanwhile, buying conditions for durable goods dropped sharply because shoppers see high prices and expensive borrowing.

Why Moods and Wallets Disagree

Spending data tells a different story. Bank of America Institute found each household put 6.2% more on cards in September than a year before. Services led at 5.4%, with non-gas retail at 3.5%.

So customers are complaining and still paying. However, that gap can close fast if prices keep climbing. Sentiment often shows up in behavior with a lag, which is why founders who wait for sales to drop usually react too late. The same pattern showed up when tariffs and Canadian shoppers collided, with mood shifting buying habits before revenue reports caught up.

Inflation Expectations Change How Customers Buy

Consumers now expect prices to rise 4.7% over the next year. Hsu noted that the figure towers over the 3.4% recorded in February, prior to the start of the Iran conflict, and tops anything seen in 2024. When people expect higher prices, they tend to hunt for discounts, trade down, or delay purchases.

The University of Michigan publishes its survey methodology and past results on its Surveys of Consumers site. It is worth a bookmark if your forecasts depend on consumer demand. Compare each release with your own conversion data, because the two together tell a clearer story than either one alone.

Moves to Make While Buyers Stay Cautious

You cannot change national sentiment, but you can change how your offer lands. Start with the actions below, and review the small business outlook for how other owners are budgeting.

• Test two price points or bundles instead of a blanket discount, so you protect margin.
• Offer payment plans or smaller starter packages for expensive products.
• Keep a cash cushion large enough to cover a slow month without panic cuts.
• Ask your best customers what would make them buy sooner, then act on the answers.

Reading the Signal for Your Type of Business

Not every company feels a sentiment slump the same way. Businesses that sell optional products, such as décor, gadgets, or premium subscriptions, usually see hesitation first. Companies that sell necessities or save customers money often hold steadier.

If you sell to other businesses, the picture is less direct but still real. Your clients’ customers are the ones feeling frustrated, so buyers may ask for longer payment terms or smaller orders. Listen for those requests in sales calls, because they often show up before the numbers do.

Meanwhile, remember that a cautious customer is still a customer. Shoppers who feel squeezed pay close attention to clarity, guarantees, and honest pricing. A simple return policy and a transparent price breakdown can do more for conversion than a loud promotion. In short, reduce the risk a buyer feels, and the sentiment headline matters less to your sales.

Questions Founders Are Asking

Does low consumer sentiment mean a recession is coming?

Not by itself. Sentiment measures attitudes, and spending data still looks firm. Treat it as an early warning to prepare, not a prediction.

Should I cut prices now?

Probably not across the board. Targeted offers and clearer value usually protect profit better than broad markdowns.

Signals Worth Tracking Through November

The Bureau of Labor Statistics releases September inflation figures this week, and the final October sentiment number will follow. Watch both, along with your own repeat purchase rate and average order size.

If sentiment stays near its record low while inflation expectations keep rising, expect shoppers to get pickier. The founders who win this stretch will be the ones who show clear value early and keep cash flexible.

One last habit helps. Write down the three questions your customers ask most often this month, and check whether your website, emails, and sales scripts answer them clearly. When shoppers feel unsure, clear answers build confidence quickly, and confidence is exactly what the survey says is in short supply right now.