Consumer Sentiment Falls to 3-Year Low

Worries over the government shutdown surged in the early part of November, pushing consumer sentiment to its lowest in more than three years and just off its worst level ever, according to a University of Michigan survey released Friday.

The university’s monthly Index of Consumer Sentiment posted a reading of 50.3 for the month, indicating a decline of 6.2% on the month and about 30% from a year ago.

Economists surveyed by Dow Jones had been looking for 53.0 after October’s 53.6. Sentiment was last this low in June 2022 as inflation hovered around its highest level in 40 years. November’s reading was the second lowest going back to at least 1978.

Concerns about the ongoing impasse in Washington topped consumers’ fears, outweighing a boost in sentiment from fresh record highs in stock prices, said Joanne Hsu, survey director .

Other measures in the survey painted a similar picture.

The current conditions index slid to 52.3, a drop of nearly 11% from last month and the lowest in its history going back to 1951, while the future expectations measure fell to 49.0, down 2.6%. On a year-earlier basis, the two measures respectively slumped 18.2% and 36.3%.

Measures of inflation held relatively in check, with a drop in the longer-term outlook.

The outlook for one year from now nudged higher to 4.7%, while the five-year measure was at 3.6%, down 0.3 percentage point.