Consumer sentiment dropped 3.9% in November, according to data from the University of Michigan.
“While this marks the fourth consecutive month of declines, November’s reading reflects a balance of factors, some of which improved while others worsened. More-favorable current assessments and expectations of personal finances were offset by a notable deterioration in expected business conditions,” said Joanne Hsu, director of the Surveys of Consumers. “In particular, long-run business conditions plunged by 15% to its lowest since July 2022. Younger and middle-aged consumers exhibited strong declines in economic attitudes this month, while sentiment of those age 55 and older improved from October.”
November’s consumer sentiment reading came in at 61.3, a 2.5 point drop from October’s reading of 63.8, but still 8.1% higher year-over-year.
Inflation expectations for the future, meaning the year ahead, grew slightly from 4.2% last month to 4.5%, the highest reading since April 2023. Long-run inflation expectations continued to improve slightly, from 3% last month to 3.2%. Long-run inflation expectations haven’t seen a reading this high since 2011.
“These expectations have risen in spite of the fact that consumers have taken note of the continued slowdown in inflation; consumers appear worried that the softening of inflation could reverse in the months and years ahead,” added Hsu.
Dr. Selma Hepp, chief economist at CoreLogic, commented that “the final numbers are in, and the American consumer is still saving their pennies going into the new year. We expect a modest increase in household spending due to the holiday season, but generally, most households are being very conservative as they maintain a cautious outlook with the expectation that prices at the grocery store and elsewhere will continue to stay high.”
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