Good news! The marquee gauge of consumer sentiment in the US improved in the final estimate for November compared to the preliminary reading.
Bad news! The final estimate still counts as one of the worst readings in the entire history of the survey, and when taken in conjunction with a new record low (bar none) on one of the constituent indexes and what may as well be a record low on the other, it’s entirely fair to call this the worst consumer sentiment report in almost half a century of data.
Sometimes it occurs to me that the fortunate among you — which, let’s face it, is pretty much all of you, because how many downtrodden regular people read stock market commentary? — don’t get it, so let me just state this in unequivocal terms: Regular people are miserable out there, and not just on days when Nvidia refuses to rally.
As University of Michigan survey director Joanne Hsu put it Friday, “sentiment lifted slightly from its mid-month reading after the federal shutdown ended [but] consumers remain frustrated about the persistence of high prices and weakening incomes.”
Got that? “High prices and weakening incomes.” That’s what real people care about, not the damn stock market, which is irrelevant for 50% of American society and more or less irrelevant for another 25% of households.
At 51, the headline Michigan readout ticked up from 50.3 in the provisional print. The record low’s 50.2, “achieved” midway through the Biden presidency when Joe’s economy was cannibalizing itself as nine-handle inflation ate away at wage gains and greedily chewed up transfer payments like an octogenarian gumming through a vanilla ice cream cone.
The figure below shows all three main gauges — the headline sentiment index and its constituents — converging on 51. That’s not a good thing. As noted above, it’s indicative of the worst household sentiment in at least half a century.
To reiterate: All three of these indexes are either at a record low or may as well be. And the data reaches as far back as the late 1970s.
Although well below the harrowing heights seen in and around “Liberation Day,” the survey’s measures of inflation expectations remain far too high at 4.5% over the near-term and 3.4% over the medium- to long-term.
Consumers, Hsu said Friday, “continue to report that their personal finances now are weighed down by the present state of high prices.”
If you recall, there was one silver lining in the preliminary version of the November Michigan poll: Consumers with the largest tercile of stock holdings evidenced an improvement in sentiment. Well, guess what?
“By the end of the month, sentiment for consumers with the largest stock holdings lost the gains,” Hsu went on, adding that the mood among the stock-rich “dropped about two index points from October, likely a consequence of the stock market declines seen over the past two weeks.” Now that’s an American tragedy.
Don’t worry too much about the rich, though. “The wealthiest consumers appear equipped to continue spending,” the survey said, before noting that the “deteriorating financial positions of non-stockholders” are a reminder that “aggregate economic statistics can obscure vulnerabilities within certain parts of the population.”
Yes, “certain parts of the population.” As a quick reminder: The top 10% of American households own almost 88% of the stocks. Nothing to see here, folks, just a meritocracy working as intended.
And we wonder how we ended up with a dictator.
I don’t think the rich people you talk about here are Trump voters, the others mostly were, maybe not now.
Readers here are, by and large, convinced of the meritocracy narrative because they don’t want to admit that their lot in life is (far) more luck of the draw than it is a product of their own ingenuity or hard work. Failure to come to terms with that makes it impossible for the well-to-do to understand how so many people could vote away their own democracy. There are a lot of reasons people vote for Trump, but one of them is the simple fact that the system’s broken and by now people would rather just hand it over to a grifting charlatan out of sheer spite (or burn it down entirely) than they would spend another day listening to lucky people explain how if only they’d worked a little harder, they’d have stocks too.
(Apologies for the original reply, by the way — i.e., for the one I briefly posted before I wrote the one above. At first I misunderstood what you meant by “here.”)
Heisenberg, it seems that you are a fan of the “vibe-cession” theory named by Kyla Scanlon, and that this survey would suggest that we remain in the deepest throes of. However, how do you determine when we shift from being in a “vibecession” for the 80-90%, or just detail that we are in the early stages of neo-serfdom for all but the more affluent in society? Or am I just a fool and the only difference between vibecession and neo-serfdom is that one word is palatable for the media and the other isn’t?
Agreed. Vibesession gives the impression that things will change. In reality, we know this a globalization trend set off decades ago, the logical conclusion becoming even more apparent, and spilling over with the ai narrative.
I have seen numbers that showed the top 10% of American households own closer to 93% of the S&P 500. An absolutely stunning number. It means that 89% of Americans have seen virtually none of the record gains made these past few years. It truly epitomizes the “K-shaped” economy.
Outside of AI capex and the upper parts of the “K”, the rest of the US economy is starting a recession. That’s what I believe, even if the government data doesn’t fully support it – yet. So, more than merely vibes.