Americans are feeling worse about the economy than they have in years. Consumer sentiment plunged in November to near-record lows, hitting levels not seen since the worst days of 2022 when inflation was spiraling out of control.
The University of Michigan’s consumer sentiment index dropped to 50.3 this month. That’s down from 53.6 last month and way down from 71.8 a year ago. To put that in perspective, the only time it’s been worse was June 2022, when it hit a record low of 50 during the peak of post-pandemic inflation.
What’s driving this collapse in confidence? Pretty much everything. The job market is slowing down. Inflation refuses to go away. And the government shutdown has been dragging on for over a month now with no end in sight.
“Consumers are now expressing worries about potential negative consequences for the economy,” said Joanne Hsu, who directs the Michigan Surveys of Consumers. She pointed out something particularly striking: this isn’t just one group of people freaking out. The decline in sentiment cut across age groups, income levels, and even political lines. Democrats, Republicans, young, old, rich, poor—everyone’s worried.
Well, almost everyone. There’s one group that’s actually feeling pretty good right now: wealthy stockholders. The top third of stock owners are benefiting from a recent market rally, and that’s lifted their spirits. But that just highlights how disconnected the stock market has become from how regular Americans experience the economy.
Here’s what makes this particularly concerning. The Michigan current conditions index—which measures how people feel about their situation right now, not in the future—fell to 52.3. Last month it was 58.6. In November 2024, it was 63.9. That’s a steep, fast drop.
People aren’t just worried about tomorrow. They’re struggling today. The unemployment rate has climbed from 4 percent in January to 4.3 percent in August. We don’t even have more recent numbers because the shutdown has stopped federal data collection. Job growth has plunged too. If you’re looking for work or worried about keeping your job, these aren’t abstract statistics. They’re your life.
Republicans are learning the hard way that economic anxiety translates into votes. Trump and GOP leaders are facing serious backlash over how they’ve handled the economy and particularly this shutdown. American families are feeling the pain, and they’re not happy about it.
Tuesday’s elections were brutal for Republicans. Mikie Sherrill won the New Jersey governor’s race. Abigail Spanberger took Virginia. Both Democrats won easily. But it wasn’t just the big races. Democratic candidates for state legislature seats did surprisingly well in New Jersey and Virginia, even in areas that have been Republican strongholds for years.
That’s the kind of result that makes political strategists nervous. Republicans rode economic concerns to victory in 2024. Now, less than two years later, the script has flipped. Economic frustration is working against them heading into 2026.
Trump isn’t buying any of this doom and gloom. In a speech Wednesday, he touted his economic record and said he’d saved the economy from ruin after beating Biden. He pointed to his tax cut bill from July, money coming in from tariffs, and wages going up.
Then he told media that prices have already come down. “I think they’re coming down. I think they’re down already,” Trump said in the interview. He blamed Republicans for not talking about affordability enough and accused Democrats of lying about the economy.
But there’s a problem with Trump’s story. The actual data doesn’t support it. The annual inflation rate in September was 3 percent, measured by the consumer price index. That’s exactly where it was in January. It’s also higher than the 2.7 percent from November 2024. Trump keeps saying he defeated the inflation surge from the Biden years, but inflation is still running above where the Federal Reserve wants it.
Michael Peace, who’s the deputy chief U.S. economist at Oxford Economics, thinks sentiment might bounce back once the shutdown finally ends. And honestly, ending the longest government shutdown in history would probably help. Peace also thinks inflation is close to peaking, and a strong tax refund season next year could boost people’s real income.
But—and this is a big but—Peace is worried about something else. “We are getting increasingly concerned that a combination of past over-hiring and an AI-related productivity surge results in a jobless expansion,” he said. Translation: the economy might grow without actually creating jobs. That would be “a more prolonged drag on consumers’ moods.”
Think about that scenario for a second. Even if inflation calms down and the shutdown ends, if people can’t find work or feel like their jobs are at risk, they’re going to stay anxious. The fact that sentiment has collapsed so broadly—across every demographic group—suggests this recovery won’t be easy or quick. You can’t just fix one thing and expect everyone to feel better when multiple problems are hitting at once.
