University of Michigan Releases Preliminary Results of Its Consumer Sentiment Index for November

On Friday, the University of Michigan released the preliminary results of its Surveys of Consumers for November.

• The Index of Consumer Sentiment fell to a reading of 50.3 in November, down 6.2% from 53.6 in October. Year-over-year, the index was down 29.9% from 71.8 in November 2024.
• Current Economic Conditions declined to a reading of 52.3 in November, down 10.8% from 58.6 in October and 18.2% below 63.9 in November 2024.
• The Index of Consumer Expectations fell to 49.0 in November, down 2.6% from 50.3 in October and 36.3% below 76.9 in November 2024.

In remarks accompanying the release, Surveys of Consumers Director Joanne Hsu said:

“Consumer sentiment fell back about 6% this November, led by a 17% drop in current personal finances and an 11% decline in year-ahead expected business conditions. With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy. This month’s decline in sentiment was widespread throughout the population, seen across age, income, and political affiliation. One key exception: consumers with the largest tercile of stock holdings posted a notable 11% increase in sentiment, supported by continued strength in stock markets. Interviews for this release closed prior to [the November 4] elections.

Year-ahead inflation expectations inched up from 4.6% last month to 4.7% this month and remained well below readings in May in the wake of the initial announcements of major tariff changes. Long-run inflation expectations declined from 3.9% last month to 3.6% in November. These expectations are now below the midpoint between the readings seen a year ago and the 2025 peak reading from April.”