Consumer sentiment as measured by the University of Michigan/Thomson Reuters index fell from 82.7 in October to 74.5 in November. All the talk and news coverage related to the fiscal cliff is having an impact on consumers expectations for the future, which plunged by 13 points in November.
The current conditions subindex fell just 0.8 points and remains near the U.S. economic recovery's high point.
Oddly perhaps, inflation expectations are moving higher, even as gasoline prices fall. The one-year expectation for inflation is now 3.3%. That's a little difficult to parse, given that virtually every other 12-month inflation estimate is much closer to 2% going forward. What the inflation reading may mean is that consumers feel pinched as they get into serious holiday shopping mode.
Today's drop in consumer confidence contrasts sharply with the earlier report out today on U.S. unemployment, which fell to 7.7%. Markets seem to prefer the sunnier view from the unemployment report, with the S&P and the Dow both up, while the Nasdaq is down fractionally.
Filed under: 24/7 Wall St. Wire, Consumer Goods, Consumer Product, Research Tagged: featured