US consumer sentiment declines to near lowest on record

U S consumer sentiment tumbled to near the lowest on record as the leadership shutdown weighed on the economic outlook and high prices soured views about personal finances The preliminary November sentiment index dropped points to just above a June reading of that was the weakest in University of Michigan information back to The gauge was lower than all but one estimate in a Bloomberg survey of economists A measure of current economic conditions slumped points to a record low of as anxiety mounted about the impact from the cabinet shutdown The drop in overall sentiment was broad across age income and political groups the account evidenced Among Democrats and political independents confidence slid to the lowest in information back to While spontaneous mentions of high prices increased for a fifth month inflation expectations eased over the longer term Consumers saw costs rising at an annual rate of over the next five to years a three-month low Price expectations for the next year edged up the information issued Friday exhibited Consumers perceive pressure on their personal finances from multiple directions Joanne Hsu director of the survey disclosed in a declaration Consumers also anticipate that labor markets will continue to weaken in the future and expect to be personally affected Similarly separate facts on Friday from the Federal Reserve Bank of New York evidenced a third straight month of increasing anxiety about the job realm The perceived likelihood of becoming unemployed within the next year climbed to in October the highest since April The University of Michigan s measure of current personal finances declined to a six-year low while buying conditions for big-ticket goods were considered the worst since mid- Fears about unemployment jumped this month with of respondents to the university s survey expecting it to rise in the year ahead more than double the year-ago share Moreover consumers expectations over their own probability of job loss worsened this month reaching the highest reading since March Hsu commented On Wednesday ADP Research Institute published that private-sector payrolls rose by in October the first increase in three months The modest pace of hiring alongside a series of high-profile layoff announcements from major companies helps explain why consumers remain pessimistic about the labor field The expectations index slid to a six-month low of The longest establishment shutdown in U S history is obscuring the view of the business activity as key federal content are delayed Private-sector sources including the university s sentiment survey provide a partial substitute amid the blackout The November survey was conducted from Oct to Nov While any recovery when the shutdown ends would leave sentiment low by historical standards we still expect fairly healthy consumption advance this quarter and into next year as the link between sentiment and spending has been weak in modern years Thomas Ryan North America economist at Capital Economics declared in a note