WASHINGTON, Nov 8
American consumer confidence tumbled to a 3.5-year low in early November, as the ongoing government shutdown rattled households across political lines and heightened worries about the economy’s direction, according to new data released Friday.
The University of Michigan’s Consumer Sentiment Index dropped to its weakest reading since mid-2022, reflecting growing pessimism about both current financial conditions and future expectations. Economists said the decline underscores the psychological toll of Washington’s budget standoff on consumer outlook and spending plans.
“People are anxious about missed paychecks, disrupted services, and the uncertainty that a prolonged shutdown creates,” said survey director Joanne Hsu. “The drop cuts across all income and partisan groups.”
Shutdown, inflation, and rates weigh on mood
The sentiment slump mirrors broader unease over the federal shutdown’s potential drag on growth, with roughly 800,000 federal workers furloughed and key economic data releases delayed. Persistent inflation pressures and high borrowing costs have added to household strain, even as unemployment remains near historic lows.
Wall Street analysts warned that if the shutdown extends past mid-November, holiday season spending could take a hit, further slowing the US economy in Q4. The Federal Reserve has maintained a cautious stance, signaling no immediate rate cuts despite softening data.
Political and market ripple effects
Economists say falling consumer sentiment could become a political flashpoint, with both parties trading blame over the fiscal impasse. The Dow and S&P 500 opened slightly lower Friday, reflecting investor jitters about Washington’s inability to resolve the funding crisis.
