Consumer sentiment drops to 3-year low as Americans worry about shutdown’s economic impacts

US consumer sentiment plunged in November as Americans feared the government shutdown’s effects on the economy and their personal finances.

Overall sentiment dropped to 50.3, about a 6% decline from October, according to the University of Michigan’s preliminary survey of consumers. The pullback was led by respondents’ worsening outlook for their own current personal finances and expectations for year-ahead business conditions, leaving the index of consumer sentiment down nearly 30% from a year ago and the lowest since 2022.

“With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy,” Joanne Hsu, the director of the survey of consumers, said in a statement Friday.

Read more: How the government shutdown affects your student loans, Social Security, and more

Consumers with large amounts of stock holdings were more sanguine, seeing an 11% increase in sentiment, in yet another warning sign of a K-shaped economy where the wealthy are bolstered by a strong stock market.

More generally, Americans’ feelings about the economy have been dim this year amid higher prices and a sluggish labor market, though official data about what’s happening with jobs is at a standstill during the government shutdown, now the longest in US history.

Private data, meanwhile, supports some of the bad vibes about the job market: A report Thursday from Challenger, Gray & Christmas said last month was the worst October for layoff announcements in more than 20 years. Job growth also appears to be muted, and postings are lower as the unemployed struggle to find available work.

Read more: What is a ‘K-shaped’ economy, and what’s causing the divide?

Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at emma.ockerman@yahooinc.com.

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