Consumer Sentiment from the University of Michigan declined this month, reversing much of its rebound from one of the most pessimistic levels on record. While the prior rebound in Sentiment was driven by an easing of inflation pressures, an increase in consumers’ inflation expectations in November has started to weigh on the measure once again. Furthermore, evaluations of the labor market worsened significantly, contributing to the decline in Sentiment. Both the Current Conditions and Future Expectations components fell in the latest report (see graphs below), and both remain at historically recessionary readings. This will be a key indicator to watch in the months to come as consumers continue to exhaust their options for keeping spending levels high this holiday season.
Eli Petropoulos, CFA – Sr. Market Analyst
