The mood among consumers darkened in November as the government shutdown dragged on, according to a new survey released Friday.
The University of Michigan’s consumer-sentiment index fell to 50.3 in a preliminary November reading, down from 53.6 in the prior month. That’s the lowest level since June 2022, which was the lowest level on record.
Economists polled by the Wall Street Journal had expected sentiment would slip to 53.0 from 53.6 in October.
Key details: This month’s decline in sentiment was widespread, with one key exception — consumers with the largest portion of stockholdings.
For the rest of the country, consumers became increasingly concerned about their personal finances. There was also a drop in year-ahead expected business conditions.
According to the report, a gauge of consumers’ views on current conditions tumbled to 52.3 in November from 58.6 in the prior month, while a barometer of their expectations fell to 49 from 50.3.
Year-ahead inflation expectations inched up to 4.7% in November from 4.6% in the prior month.
Big picture: The outlook has been gloomy for a while due to concerns about jobs and inflation. Despite these concerns, consumer spending had held up.
Looking ahead: The shutdown could lead even higher-income households to increase precautionary savings, potentially weakening the spending growth that has kept the economy strong, said Elizabeth Renter, senior economist at NerdWallet.
Source: MarketWatch
