The University of Michigan's survey released on November 7, 2025, revealed a sharp decline in U.S. consumer confidence, with the Index of Consumer Sentiment dropping to 50.3 in early November, a 6.2% decrease from October and roughly 30% lower than the same period a year ago. This reading is now lower than levels seen during the 2008 financial crisis and is the second worst since tracking began in 1978, barely above the all-time low.
Survey Director Joanne Hsu attributed the collapse to the longest government shutdown in U.S. history, which began on October 1 and has dragged on for over a month, overshadowing record stock market highs that would typically boost public outlook. Hsu noted that Americans across all age, income, and political groups are expressing worries about potential negative consequences for the economy.
Key components of the index showed significant declines: the current conditions index fell to 52.3, down nearly 11% from the previous month and the lowest since its inception in 1951, while the future expectations index slid to 49.0, a 2.6% monthly drop. Year-over-year, declines were even steeper—18.2% for current conditions and 36.3% for expectations.
Inflation expectations shifted slightly, with the one-year outlook rising to 4.7% and the five-year estimate falling to 3.6%. The survey highlighted disparities based on wealth, as households with substantial stock holdings saw an 11% increase in sentiment, but this did not offset the broader downturn.
The shutdown's impact extends beyond sentiment, with the Bipartisan Policy Center reporting that about 670,000 federal employees have been furloughed and 730,000 are working without pay. Critical programs like SNAP, which serves 42 million Americans, have been disrupted, amplifying financial strain. Economists, such as Elizabeth Renter of NerdWallet, warn that tighter financial conditions are spreading to middle-income families.
Market implications include potential increased volatility, particularly for risk assets like Bitcoin (BTC) and Ethereum (ETH), though initial reactions have been muted. Historical patterns suggest such sentiment drops can lead to risk-off periods, but no immediate interventions or targeted funding have been reported, with institutional players remaining cautious.
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