US Consumer Sentiment Plunges to 50.3 Amid Prolonged Government Shutdown

US consumer sentiment has fallen to its second-lowest level on record, with the University of Michigan's preliminary November 2025 index registering a significant drop to 50.3. This figure places current sentiment below the low recorded during the 2008 financial crisis, signaling widespread economic apprehension across the nation. The decline is primarily attributed to a federal government shutdown, now in its second month, which has fueled worries about the economy's future.

The November reading marks a considerable decrease from October's 53.6 and is just above the all-time low of 50.0 seen in June 2022 during a period of high inflation. Joanne Hsu, director of the University of Michigan's Surveys of Consumers, stated, "With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy." She added that the decline was "widespread throughout the population, seen across age, income, and political affiliation."

Beyond the government impasse, persistent anxieties over personal finances and stubbornly high consumer prices have kept the index anchored near multi-year lows since early 2025. The "current economic conditions" index, a sub-component of the overall sentiment, fell to an all-time low of 52.3 in November, reflecting consumers' deteriorating views of their present financial situation. Conversely, sentiment among consumers with the largest stock holdings saw an 11% increase, likely buoyed by continued strength in equity markets.

The ongoing government shutdown has also led to a blackout on federal economic data releases, making private-sector surveys like the University of Michigan's even more crucial for gauging the nation's economic health. While year-ahead inflation expectations edged up slightly to 4.7%, long-run inflation expectations saw a decrease from 3.9% to 3.6%. Economists warn that this pervasive sense of pessimism is likely to translate into reduced consumer spending, posing a significant drag on economic growth.