By: Ken Chase.
With the holiday shopping season looming large on the economic horizon, the latest University of Michigan consumer sentiment survey suggests that consumer confidence is on the decline. According to that consumer sentiment index, the level of confidence dropped from a score of 59.9 in October to 56.8 in November.
In a statement addressing the survey findings, University of Michigan Surveys of Consumers director Joanne Hsu outlined just some of the concerns expressed by respondents:
“Headwinds to consumer strength have started to emerge. Strong incomes have thus far helped consumers, particularly lower-wage workers, cope with high inflation. However, their perceptions of weakening labor markets could make them pull back their spending in the future. Wealthier households are experiencing declining stock markets and home values, which would also produce drag on their willingness to spend.”
Many observers have noted that rising wages have lagged behind inflation, limiting many families’ ability to cope with ever-increasing prices. And with the Federal Reserve’s ongoing effort to curtail rising inflation by increasing interest rates, it is little wonder that many respondents believe that those high prices could persist for years.
Also worthy of note is that a record number of survey respondents indicated that this is not a positive environment for home buyers. According to the university, that sentiment was shared by 83 percent of the people they surveyed.
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