US consumer sentiment drops to 56.8 in Nov 2022: Report | So Good News
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Today’s economic index fell to 58.8 against 65.6 in October. This is a decrease of 6.8-point or 10.4 percent in the month. The index is just five points above June’s low of 53.8 and is in line with the recession, according to results from the University of Michigan Surveys of Consumers.
The pessimistic consumer sentiment reflects a wide range of problems, including inflation, rising interest rates, falling commodity prices, and growing job market optimism.
Overall US consumer sentiment fell in November 2022, the lowest level yet. Composite consumer sentiment fell to 56.8 in November, down from 59.9 in October. The index fell to 50.0 in June from 101.0 in February 2020 at the start of the recession. The drop in November was 3.1 points.
The second component – consumer expectations, one of the leading indicators of the American Institute for Economic Research’s (AIER) – fell 0.6 points, or 1.1 percent on the month, to 55.6. The sector index is 8.3 points above July 2022’s low of 47.3 and is consistent with previous recessions, Robert Hughes said in an article on the AIER website.
“Consumer sentiment fell 5 percent from October’s low, shedding a third of the gains since June’s low,” the report added. “Along with rising inflation, consumer sentiment has also been weighed down by rising credit costs, falling property prices, and weakening labor market prospects. Purchases of durable goods, which had improved last month, fell sharply in November, falling 19 percent through September on the back of higher interest rates and higher prices. “
“Long-term investment declined slightly by 6 percent, while short-term investment and personal investment remained unchanged,” the report added.
One-year inflation expectations fell in November, falling to 4.9 percent. The result remains below the 5.4 percent reading in March and April but above the 4.7 percent reading in September.
Expectations for five-year inflation rose, coming in at 3.0 percent in November. These results are well within 25 years of 2.2 percent to 3.5 percent. “Long-term inflation expectations, currently at 3.0 percent, have remained modest (although they have risen) 2.9-3.1 percent for 15 of the past 16 months,” the report said. Furthermore, “Uncertainty about these expectations remained at a high level, indicating that the stabilization of these expectations is unlikely.”
Overall, financial risks are rising due to rising inflation, a tighter Fed, and further recession due to Russia’s invasion of Ukraine. The economic outlook is still very uncertain.
Fibre2Fashion News Desk (NB)
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