November’s preliminary reading of Consumer Sentiment fell further below its pandemic lows due to intensifying inflation fears. As stated in this morning’s report: “Consumer sentiment fell in early November to its lowest level in a decade due to an escalating inflation rate and the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation.” Both the Current Conditions and Future Expectations components were pushed to new lows, showing that consumers don’t see a reprieve from pricing pressures coming. If an inflationary psychology continues to take hold of consumers, inflation could manifest itself at a higher level for longer than the Federal Reserve expects.
