Consumer sentiment plunged in November to near-record lows

Consumer sentiment plunged to near-record lows in November as the slowing job market, stubborn inflation and the government shutdown post increasing problems for President Trump.

The University of Michigan consumer sentiment index dropped to 50.3 in November, according to data released Friday, down from 53.6 percent last month and 71.8 percent one year ago.

The November consumer sentiment reading was the worst since the record low of 50 in June 2022, which came near the peak of the post-pandemic inflation surge.

“With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy, said Joanne Hsu, director of the Michigan Surveys of Consumers.

“This month’s decline in sentiment was widespread throughout the population, seen across age, income, and political affiliation.”

Hsu said only one slice of the population felt better about the economy: those in the top 33 percent of stock-holders, who have benefited from a recent market rally.

Views on the broader economy also dropped sharply, with the Michigan current conditions index falling to 52.3 from 58.6 in October and 63.9 in November 2024.

The surveys come as Trump and Republicans face increasing backlash over the state of the economy and the shutdown’s impact on American families. 

Republicans took brutal losses in Tuesday elections, with Gov.-elects Mikie Sherrill (D-N.J.) and Abigail Spanberger (D-Va.) cruising to victory over their GOP opponents. Democratic candidates for state legislative seats in New Jersey and Virginia also had a strong showing, even in historically GOP-dominated areas.

The massive night for Democrats raised alarms among Republicans, who rode concerns about the economy to victory in 2024 and may be on the other side of that dynamic in 2026.

In a Wednesday speech, Trump touted his economic record and claimed he helped bring the economy back from the brink of ruin after toppling former President Biden. The president cited his enactment of a major tax cut bill in July, revenue generated by his tariffs and rising wages as proof of his deft economic hand.

In an interview with Fox News on Wednesday, Trump also claimed prices had already come down during his administration.

“I think they’re coming down. I think they’re down already,” Trump told Fox News’s Bret Baier in an interview Wednesday. “I think the biggest problem is Republicans don’t talk about it. They don’t talk about the word ‘affordability,’ and Democrats lie about it.”

Trump has claimed to have defeated the surge of inflation seen under Biden, but data paints a different picture. The annual inflation rate of 3 percent in September, as measured by the consumer price index, was even with its level in January and up from 2.7 percent in November 2024.

The unemployment rate has also risen from 4 percent in January to 4.3 percent in August, the most recent month for which federal data is available due to the shutdown, while job growth has plunged.

Michael Peace, deputy chief U.S. economist at Oxford Economics, said despite the slowdown in the economy, the steep drop in sentiment could rebound after the shutdown, which has already broken the record for longest in history.

“We also think that inflation is close to peaking, and a rebound in real incomes growth next year, helped by a strong tax refund season, should help to underpin confidence,” Pearce said.

“That said, we are getting increasingly concerned that a combination of past over-hiring and an AI-related productivity surge results in a jobless expansion, which would likely be a more prolonged drag on consumers moods.”