"Consumer sentiment dropped to a three-year low and close to the lowest point ever recorded by the University of Michigan one month into the government shutdown, with pessimism over personal finances and anticipated business conditions weighing on Americans. The November survey showed the index of consumer sentiment at 50.4, down a startling 6.2% from last month and it plunged nearly 30% from a year ago."
"Big tech companies, particularly in artificial intelligence, have driven explosive returns for investors. The tech-heavy Nasdaq is up 17% this year. "The top 20% of households by income drive 40% of consumer spending, and we think the wealth effect from the buoyant stock market has strengthened this year," according to Michael Pearce, deputy chief U.S. economist at Oxford Economics. The nation's largest retail trade group on Thursday forecast a trillion-dollar Christmas, with sales during November and December seen growing up to 4.2%."
The index of consumer sentiment was 50.4 in November, down 6.2% from the prior month and nearly 30% from a year earlier. Economists had expected a slight monthly increase to 54.2. The decline was widespread across age, income, and political affiliation, with the exception of households holding large stock positions. Big tech and AI-driven gains have lifted the Nasdaq about 17% this year, strengthening a wealth effect concentrated among higher-income households who drive a large share of spending. Year-ahead inflation expectations rose to 4.7% while long-run expectations fell to 3.6%. Seventy-one percent of households expect unemployment to rise, with a net reading of 62% predicting higher unemployment.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]