The ongoing federal government shutdown has taken a toll on consumer sentiment in the U.S. A recent survey by the University of Michigan shows that consumer confidence dropped nearly 6% in November, hitting an index score of 50.3. This marks the lowest level since June 2022, during the inflationary pressures of the Covid pandemic.
Economists had anticipated a slightly brighter picture, predicting an index score of 53.0. This decline affects people across various demographics—age, income, and political views. As Joanne Hsu, the survey director, noted, “Consumers are worried about the potential fallout on the economy.”
The shutdown has also paused critical federal data releases, like the monthly jobs report, leaving investors to rely on smaller, private studies for insights. A recent report from ADP revealed that private employers added 42,000 jobs in October. While this number is better than expected, it’s a significant drop compared to the average of 188,000 jobs added over the prior months.
Moreover, job cuts are on the rise. Challenger, Gray & Christmas reported that U.S. employers announced over 153,000 layoffs in October—an increase of 175% compared to the same month last year. This is the highest number of job cuts for any October since 2003.
The overall sentiment echoes growing frustration. Alex Jacquez, from Groundwork Collaborative, emphasized the disconnect between the administration and American families. He pointed to rising debt levels and increasing prices, stating, “It’s no surprise consumer sentiment is at its lowest point since 2022.”
As we navigate this challenging landscape, understanding the impacts of such trends can provide valuable insight into the broader economic picture.
For further details, check the survey data here and read more about the job trends reported by ADP here.
