University of Michigan Preliminary Consumer Sentiment Index for November Declines

The University of Michigan today (11-11-22) released the preliminary results of its Consumer Sentiment Index (CSI) for November. The Index of Consumer Sentiment dropped to a reading of 54.7, down from 59.9 in October. This is a month-over-month decline of 8.7% and year-over-year decline of 18.8% (67.4 in October 2021).

The Current Economic Conditions fell to a reading of 57.8 in November, down from 65.6 in October. This is a decline of 11.9% month-over-month and 21.5% year-over-year (73.6 in November 2021).

Finally, the Index of Consumer Expectations declined to a reading of 52.7 in November, down from 56.2 in October. This is a decrease of 6.2% month-over-month and 17.0% year-over-year (63.5 in October 2021).

In remarks and analysis prepared to accompany the release of the preliminary results, Dr. Joanne Hsu, Director of Surveys for the University of Michigan, said:

“Consumer sentiment fell about 9% below October, erasing about half of the gains that had been recorded since the historic low in June. All components of the index declined from last month, but buying conditions for durables, which had markedly improved last month, decreased most sharply in November, falling back 21% on the basis of high interest rates as well as continued high prices. Overall, declines in sentiment were observed across the distribution of age, education, income, geography, and political affiliation, showing that the recent improvements in sentiment were tentative. Instability in sentiment is likely to continue, a reflection of uncertainty over both global factors and the eventual outcomes of the election.

Inflation expectations are little changed. The median expected year-ahead inflation rate was 5.1%, up from 5.0% last month. Long run inflation expectations, currently at 3.0%, have remained in the narrow (albeit elevated) 2.9-3.1% range for 15 of the last 16 months.”