Consumer sentiment has soured to the lowest level on record, save for one month during the worst of the inflation wave, a concerning sign for President Donald Trump.
The final reading of the University of Michigan consumer sentiment index clocked in at 51 in November, down from 53.6 the month before, the group announced on Friday. That marks the lowest reading since June 2022, when the inflation rate was three times what it is now.
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The sentiment reading is worse than during the Great Recession, worse than the savings and loans crisis during the 1980s and 1990s, and worse than most of the post-pandemic recovery. The reading came in the same month as the longest government shutdown in history and amid discontent with inflation and the cost of living.
Still, the preliminary reading for November was slightly lower than the final reading, with survey director Joanne Hsu pointing out that the numbers lifted a bit after the government reopened.
“However, consumers remain frustrated about the persistence of high prices and weakening incomes,” she said.
Not only did consumer sentiment drop this month, but inflation expectations remain high, a worrying indicator.
“Year-ahead inflation expectations inched down from 4.6% last month to 4.5% this month,” Hsu said. “This marks three consecutive months of declines, but short-run inflation expectations still remain above the 3.3% seen in January.”
Long-run inflation expectations softened a bit from 3.9% in October to 3.4% now. That is still above the Federal Reserve’s goal of 2% long-run inflation.
In addition to concerns about inflation and the cost of living, there have been signs that the labor market is slowing.
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The economy added 119,000 jobs in September and the unemployment rate ticked up a tenth of a percentage point to 4.4%, the Bureau of Labor Statistics said Thursday in a report that was delayed by the 43-day government shutdown.
That headline number was better than expected, but there were also downward revisions to past months, which showed the labor market has been in worse shape than was previously reported.
