Consumer sentiment dips as inflation, spending rise
Consumer sentiment in the U.S. fell slightly in November as Americans’ outlook on jobs and wages weakened amid rising inflation and strong spending.
The University of Michigan’s consumer sentiment index dropped to 66.8 this month, down from 67.7 in October. This marks the lowest level since 2011. The decline reflects concerns about accelerating inflation, which rose to a 30-year high of 6.2%, according to the Commerce Department.
The Labor Department reported that employers added a solid 531,000 jobs in October, a sign that the job market remains strong. However, rising prices and supply chain issues have eroded the purchasing power of many consumers. The Federal Reserve is expected to raise interest rates in an effort to curb inflation, which could slow down the economy.
Despite these challenges, consumer spending remains robust. Retail sales increased 1.7% last month, driven by strong demand for electronics, furniture, and clothing. With the holiday shopping season in full swing, retailers are hopeful that strong consumer spending will continue to boost the economy.
Overall, while consumer sentiment has dipped slightly, economists remain cautiously optimistic about the outlook for the U.S. economy. However, rising inflation and interest rates could pose challenges in the months ahead.