U.S. consumer sentiment fell to a 28-year low in November due to growing job losses, declining incomes, and plunging household wealth, a survey showed Wednesday. The University of Michigan said its final consumer-sentiment index for November fell to 55.3 from October's 57.6. The reading was far below economists' expectations of 57.7, and it deteriorated sharply after the middle of the month, when many consumers were welcoming lower gasoline prices. “Consumer confidence fell in the last half of November due to mounting job losses, falling incomes, and the evaporation of household wealth,” the report said. “Consumers were unanimous in their recognition that the economy was in recession, and nearly three in four expected the recession to deepen in the months ahead.” The university's sentiment index dates back to 1952, and its record low was 51.7 recorded in mid-1980. Though the main index remains slightly above that record low, consumers rated current conditions as the worst ever. The outlook for the future also was pessimistic, with the index of consumer expectations falling to its lowest level since July. Wednesday's consumer sentiment report came one day after a private research group reported that U.S. consumer confidence rose slightly in November—mostly due to declining gasoline prices—from October's record low. Economists closely watch consumer confidence indexes for clues on consumer spending, which accounts for two-thirds of total U.S. economic activity.
