09.11.25 - Consumer sentiment nears lowest level ever
On Friday, the University of Michigan’s November survey showed US consumer sentiment plunging to 50.3, its lowest level in over three years and the second-lowest since 1978. The reading marks a 6.2% decline from October and is down nearly 30% year-on-year.
The main driver: worries over the ongoing government shutdown, persistent inflation pressures, and growing job market uncertainty.
Economists surveyed by Dow Jones had been looking for 53.0 after October’s 53.6 reflecting deep-seated anxiety among households. Sentiment was last this low in June 2022 as inflation hovered around its highest level in 40 years
Markets: stocks initially fell on the weak consumer data but rebounded in the second half of the session
US stocks closed almost unchanged
Yields dropped first and later traded higher again
Gold back above USD 4’000/oz level
USD: lower
Cryptos: followed the equity moves
My View: While markets remain captivated by artificial intelligence and mega-cap tech stories, the real backbone of the US economy, the consumer, is flashing warning signals.
Sentiment has been depressed for months, reflecting a cocktail of inflation fatigue, political uncertainty, and job insecurity.
If households continue to feel squeezed, loan repayment stress and weaker discretionary spending could soon translate into slower growth.
We have seen this dynamic before: China’s post-pandemic experience is a clear reminder of how quickly consumption can stall once confidence erodes.
For now, AI headlines may keep investors distracted, but the underlying story could quickly shift from optimism to caution. That deserves close attention in the weeks ahead.
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