Consumer sentiment slides 7% to lowest level in a decade in November

• University of Michigan November Consumer Sentiment: 66.8 vs. 72.3 consensus and 71.4 prior.
• Current Economic Conditions: 73.2 vs. 77.9 prior.
• Index of Consumer Expectations: 62.8 vs. 67.2 prior.
• Richard Curtin, UMich's Surveys of Consumers chief economist, attributes the decline to the escalating inflation rate.
• "One-in-four consumers cited inflationary reductions in their living standards in November, with lower income and older consumers voicing the greatest impact," Curtain said.
• "Nominal income gains were widely reported but when asked about inflation-adjusted gains, half of all families anticipated reduced real incomes next year," he added.
• Higher prices for homes, vehicles, and durable goods (think appliances) were reported more frequently than any other time in more than 50 years, Curtain said.
• "It’s no surprise that Consumer Sentiment took a steep drop given inflation is rising and looks to remain high for the foreseeable future," comments Robert Frick, corporate economist with Navy Federal Credit Union.
• With plenty of cash on hand, Americans have been ramping up spending for months, regardless of inflation fears, he said.
• "In fact, the high level of spending on goods is one reason why inflation is so high," Frick added. "Initial forecasts were that spending would switch more to services at this point, which would have less of an effect on inflation, but that hasn’t happened as COVID-19 fears keep the demand for services relatively low."