Preliminary survey data released by the University of Michigan on Friday showed that U.S. consumer sentiment deteriorated further in October, with consumers' assessment of current economic conditions falling to a record low. Persistent inflation pressure, elevated gasoline prices and rising borrowing costs are squeezing American household budgets even more.

The preliminary reading of the University of Michigan consumer sentiment index for October fell to 46.3, the lowest since May this year and below economists' forecast of 47.6. The index measuring how consumers view current economic conditions dropped sharply to 44.7 from 50.9 in September, the lowest level on record. However, the consumer expectations index edged up to 47.3 from 46.3, rising for the first time since July.

On inflation expectations, consumers expect prices to rise 4.7% over the next year, slightly above 4.6% in September, while longer-term inflation expectations for the next five to 10 years rose to 3.5%, also a modest increase from last month, indicating consumers remain cautious about the future path of prices.

Recently, persistently high gasoline prices, combined with rising borrowing costs and slower corporate hiring, have further weighed on consumer sentiment. At the same time, overall U.S. price growth has outpaced wage growth in recent months, squeezing households' real purchasing power. Joanne Hsu, director of the University of Michigan consumer survey, said low-income consumers and those with smaller stock holdings saw particularly pronounced declines in confidence this month.

From a political standpoint, confidence improved among Democratic and Republican supporters but was offset by a decline among independent voters. Hsu noted: "Despite differences, consumers across the political spectrum agree that the outlook for the U.S. economy has worsened compared with before the outbreak of the Iran conflict earlier this year."

It is worth noting that although U.S. consumer sentiment has remained at historically low levels for much of this year, actual consumer spending has remained relatively resilient. A generally stable job market and strong stock market performance continue to support consumer spending on goods and services. The survey showed that consumers' assessments of their current personal finances were roughly unchanged this month, but concerns about rising interest rates pushed their views on buying conditions for durable goods such as cars and appliances to a record low.

In addition, a special report released by the University of Michigan on Friday about the impact of rising gasoline prices showed that only about 31% of respondents expect to maintain normal spending levels over the next year, while more than half said they would cut spending on household goods, cars, dining out and vacations. The consumer sentiment survey covered responses from September 22 to October 5. Overall, although U.S. consumer spending has not yet weakened markedly, persistent inflation, higher energy prices and rising financing costs are prompting more households to consider tightening their budgets, and the outlook for future consumption growth still faces pressure.