U.S. Consumer Confidence Crashes to Multi-Decade Low Amid Shutdown
Economic optimism in the United States has plunged to levels not seen in years, as households face the twin pressures of a paralyzed government and persistently high prices.
Key Takeaways
- U.S. consumer sentiment plunges to one of the lowest levels since the 1970s.
- Job security fears rise sharply as shutdown and inflation weigh on outlook.
- Economists expect spending to hold up despite historic pessimism.
Fresh data from the University of Michigan shows sentiment collapsing to 50.3 in early November, one of the weakest readings in more than four decades of records. The survey captures a public increasingly anxious about job security, strained finances, and Washington’s inability to restore normal operations.
Public Mood Darkens Across the Board
The report paints a bleak picture across nearly every demographic. Whether rich or poor, young or old, Democrat or Republican, Americans are reporting a sharp deterioration in their economic outlook. The university’s gauge of current conditions sank to a record low of 52.3, with respondents citing uncertainty over the prolonged shutdown and eroding purchasing power.
Survey director Joanne Hsu said consumers now feel pressure “from multiple directions,” pointing to a mix of weaker labor expectations, rising living costs, and political frustration. “They anticipate that the job market will worsen — and that they’ll be personally affected,” she explained.
Job Worries Replace Price Relief
Although long-term inflation expectations eased slightly to 3.6% — the lowest in three months — fears about employment have surged. Separate figures from the Federal Reserve Bank of New York revealed that the share of Americans expecting to lose their job within the next year jumped to 43%, the highest since the spring.
The Michigan poll also found that seven in ten respondents expect unemployment to rise in the coming year, more than double last year’s share.
Financial Strain Spreads
Households report the weakest personal finances in six years, and the mood toward major purchases like cars or appliances has collapsed to its worst since 2022. The modest uptick in October’s private payrolls — a gain of 42,000 jobs, according to ADP Research Institute — did little to change the tone, as a wave of corporate layoffs continued to dominate headlines.
Shutdown Extends the Gloom
The record-breaking federal shutdown has only amplified the pessimism. With key government data frozen, economists are relying on private surveys to assess real-time conditions. The Michigan results suggest that uncertainty itself is now a drag on sentiment, as Americans grow weary of political stalemate.
Thomas Ryan, North America economist at Capital Economics, said in a note that even if Washington resolves the standoff soon, “confidence will likely remain depressed.” However, he added that consumer spending has held up better than expected, showing “a disconnect between what people feel and what they actually do.”
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