Consumer Sentiment worsened in November, new data showed, as persistent price increases and an extended government stoppage weigh on sentiment.
“With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy,” said Joanne Hsu, the survey’s director at the University of Michigan.
The survey’s headline index fell to 50.3 in November, from 53.6 last month, based on preliminary responses.
Analysts polled by The Wall Street Journal were expecting a milder decline to 53.
The reading suggests consumer sentiment has dropped below the lows it hit in the spring, after President Trump first rolled out steep new global tariffs.
It is now just slightly above the record trough hit in 2022, amid a historic bout of inflation. Fuller end-of-month data could show a different result, however.
Bad news for the economy: American consumer sentiment took a sharp, unexpected dive in November, driven by lingering concerns over persistent price increases and the drawn-out government shutdown.
“With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy,” said Joanne Hsu, director of the University of Michigan survey.
This drop wasn’t just a slight dip—it was a significant slide. The survey’s headline index plummeted to 50.3 in November from 53.6 the previous month (based on preliminary responses). This was a much steeper fall than financial analysts expected, who had polled by The Wall Street Journal were bracing for a milder 53.0 reading.
Why this is alarming: The new reading suggests consumer sentiment has now fallen below the spring lows recorded when President Trump first introduced steep new global tariffs. Critically, it is now sitting just above the record low hit in 2022 during the height of historic inflation.
The takeaway? Shoppers are feeling the pain, and uncertainty is at a critical level. While fuller end-of-month data could paint a slightly different picture, this preliminary data is a clear warning sign for economic growth.