The preliminary November results from the University of Michigan Surveys of Consumers show overall consumer sentiment fell again in early November, continuing the move down since hitting post-recession highs in the spring. The November drop was largely a result of growing fears of rising prices.
Overall consumer sentiment decreased to 66.8 in early November, down from 71.7 in October (see first chart), a 6.8 percent drop. The index is also down 24.3 percent from the post-recession high of 88.3 in April. From a year ago, the index is down 13.1 percent.
The current-economic-conditions index fell to 73.2 from 77.7 in October (see first chart). That is a 5.8 percent decline and leaves the index with a 15.9 percent decrease from November 2020 and a 24.7 percent decline from the April high.
The second sub-index — that of consumer expectations, one of the AIER leading indicators — fell 5.1 points or 7.5 percent for the month, dropping to 62.8. The index is off 10.9 percent from a year ago and 24.8 percent from its June high (see first chart).
According to the report, “One-in-four consumers cited inflationary reductions in their living standards in November, with lower income and older consumers voicing the greatest impact. Nominal income gains were widely reported but when asked about inflation-adjusted gains, half of all families anticipated reduced real incomes next year.” The report goes on to add, “Rising prices for homes, vehicles, and durables were reported more frequently than any other time in more than half a century.”