American household confidence dipped close to a historic low in October, as elevated prices stemming from the Iran war worsened the public's economic outlook ahead of midterm elections.

The Consumer Sentiment Index from the University of Michigan's Surveys of Consumers dropped to 48.0 this month, down from a final reading of 48.1 in September. Economists surveyed by Reuters had predicted the index would land at 46.3, which matched the preliminary figure previously reported for October.

The October output, released on Friday, represents the second-lowest reading ever recorded, sitting just above the all-time minimum of 44.8 registered in May, not long after the war with Iran began.

"Purchasing power continues to dominate consumer views of the economy," said Joanne Hsu, the director of the Surveys of Consumers.…