US consumer sentiment falls to three-year low
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The news: US consumer sentiment has fallen to its lowest level in more than three years as concerns over the US government shutdown weigh on consumers.
The numbers: Data released by the University of Michigan saw the university’s monthly index of consumer sentiment fall to 50.3, a decline of 6.2% on the month and a drop of around 30% from one year ago.
A measure of economic conditions released by the university dropped almost 11% to a record low of 52.3 as the impact of the government shutdown continues to heighten anxiety. The future expectations measure fell to 49, down 2.6%
The context: The last time consumer sentiment was this low was in June 2022 when US inflation was flirting with its highest level in 40 years.
The university explained that November’s decline in sentiment was widespread throughout the population, seen across age, income, and political affiliation.
“With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy”, Joanne Hsu, the survey's director at the University of Michigan said.
One key exception to the dampened mood came from consumers holding the largest third of stock holdings posted a notable 11% increase in sentiment, supported by continued strength in stock markets. However, interviews for this release closed prior to Tuesday’s elections in the US.
The source: University of Michigan
