U.S. Consumer Sentiment Falls to Lowest Level in Over 3 Years Amid Ongoing Shutdown
U.S. consumer sentiment dropped sharply in early November, reaching its lowest level in nearly three and a half years, according to a report released on Friday. The decline comes as Americans grow increasingly concerned about the economic impact of the prolonged government shutdown.
Data from the University of Michigan’s Surveys of Consumers showed that the Consumer Sentiment Index fell to 50.3 in November, down from 53.6 in October, marking the weakest reading since June 2022. Economists surveyed by Reuters had expected a smaller drop to 53.2.
Joanne Hsu, director of the University’s Surveys of Consumers, noted that the shutdown’s extended duration—now exceeding one month—has amplified public concern. “Consumers are increasingly worried about potential economic consequences,” Hsu said, adding that the decline in sentiment was broad-based across age, income, and political groups.
The ongoing government shutdown, now entering its second month, has halted benefits such as food stamps for millions of low-income households. Hundreds of thousands of federal employees remain furloughed or are working without pay, while flight delays have affected travel nationwide as operations slow at major airports.
The report also highlighted changes in inflation expectations. Consumers now expect 4.7% inflation over the next year, slightly higher than October’s 4.6%. However, five-year inflation expectations eased to 3.6%, down from 3.9% last month.
