Once again, consumer sentiment fell in November compared with the preceding month amid concerns over personal finances amid higher prices, according to the University of Michigan’s monthly survey.
The University of Michigan’s Consumer Sentiment Index dropped to 51, hovering near one of the lowest levels in the monthly poll’s history. The final reading was slightly above the preliminary November figure, 50.3, published in the preceding two weeks, but down from 53.6, which it recorded in October. The figure aligned with the number that The Wall Street Journal had polled economists to forecast.
The Index was down 29.0 percent compared to 71.8 percent recorded in November 2024.
The University of Michigan’s Consumer Expectations Index (CEI) rose for the first time in five months, representing a 1.4 percent increase from the previous month and a 33.7 percent drop from the same period a year ago.
Surveys of Consumers Director Joanne Hsu said, “Consumer sentiment was little changed this month with a 2.6 index point decrease from October that is within the margin of error. After the federal shutdown ended, sentiment lifted slightly from its mid-month reading. However, consumers remain frustrated about the persistence of high prices and weakening incomes.
“This month, current personal finances and buying conditions for durables both plunged more than 10 percent, whereas expectations for the future improved modestly. By the end of the month, sentiment for consumers with the largest stock holdings had lost the gains seen at the preliminary reading. This group’s sentiment dropped about 2 index points from October, likely a consequence of the stock market declines seen over the past two weeks.
“Year-ahead inflation expectations inched down from 4.6 percent last month to 4.5 percent this month. This marks three consecutive months of declines, but short-run inflation expectations remain above the 3.3 percent seen in January, Hsu continued. Long-run inflation expectations softened from 3.9 percent last month to 3.4 percent in November. These expectations are now modestly above the 3.2 percent January 2025 reading. Despite these improvements in the future trajectory of inflation, consumers continue to report that their personal finances now are weighed down by the present state of high prices.”
