Consumer confidence plummets amid concerns over rising prices and rising interest rates
Consumer confidence is back in the summer slump.
The University of Michigan’s overall consumer sentiment index fell to 54.7 – its lowest level since July – in preliminary November results, down 5.2 points from 59.9 in October . The decline came amid lingering concerns about inflation and rising interest rates.
Sentiment also fell for current economic conditions, down to 57.8 from 65.6 in October, as well as those in the near future, falling to 52.7 from 56.2 the previous month.
The survey data came ahead of a better-than-expected consumer price index report, which showed inflation slowing to 7.7% in October, and the midterm elections. A report from Adobe revealed that online prices have dropped 0.7% year over year and rose 0.3% month over month in October.
“All components of the index were down from last month, but durable goods buying conditions, which had improved markedly last month, fell most sharply in November, falling 21% over the last month. basis of high interest rates as well as persistently high prices,” said Joanne Hsu, director, consumer surveys, University of Michigan.
Hsu added that the dips in sentiment were seen across the distribution of age, education, income, geography and political affiliation, showing recent improvements in sentiment were temporary.
“The volatility in sentiment is likely to continue, reflecting uncertainty both about global factors and the eventual election outcome,” she said.
Inflation expectations have changed little, the report notes. The median inflation rate expected for the coming year was 5.1%, down from 5.0% last month. Long-term inflation expectations, currently at 3.0%, have remained in the narrow (albeit high) range of 2.9-3.1% for 15 of the past 16 months.
The final sentiment data for this month will be released on November 23.