Americans’ mood about the economy dimmed in November as the record-breaking federal government shutdown stretched on. That matters for everything from holiday shopping plans to how confident we feel about big purchases.
The University of Michigan’s consumer sentiment index slipped to 50.3 from 53.6 in October, its lowest since June 2022. That represents a 6.2% month-over-month decline and is nearly 30% below last November’s level. Economists had expected a slight improvement, but concerns tied to the shutdown appear to have tipped the scales toward caution.
What stands out is the split-screen effect. Sentiment fell broadly across age, income, and political lines. Yet households heavily invested in the stock market actually reported an 11% improvement as markets hover near record highs.
That divergence matters because those investor households often spend more than their weight in overall spending. If they continue to spend, it can help cushion the broader economy, even as middle-income families, who are pivotal for Main Street retail and services, become more cautious.
Why this matters now: Sentiment is a forward-looking signal. When confidence dips, many of us instinctively tighten budgets by pressing pause on non-essentials, comparison-shopping more, and prioritizing savings. For women 35 and older who are juggling households, caregiving, and retirement goals, this shift can determine whether the next few months feel manageable or stressful.
The risk flagged by economists is that if the middle tercile of consumers throttles back, the economy’s above-trend growth could finally cool.
On the other hand, the resilience of stock-owning households hints that not all spending is stalling. That is good news for businesses relying on higher-income customers and a reminder to review your own mix of short-term needs and long-term investing plans.
As Joanne Hsu, who directs the University of Michigan’s Surveys of Consumers, put it: “With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy.”
Bottom line: Confidence has wobbled, but the story is not uniformly gloomy. If you are invested, portfolio gains may be helping you stay on track. If you are stretching a household budget, more mindful spending could be your superpower through uncertainty. For the full context, charts, and expert insights, read the original coverage at CNN Business.
