U.S. Consumer Confidence Plummets to Near-Historic Lows Amid Record Government Shutdown

This analysis is based on the Wall Street Journal report [1] published on November 7, 2025, which detailed the significant decline in U.S. consumer confidence during November 2025.

The University of Michigan’s Index of Consumer Sentiment fell to

, down from 53.6 in October, representing a and a substantial [2][3]. This marks the and the , indicating severe consumer pessimism [2]. The decline was driven primarily by concerns over the , which has now entered its 36th day, making it the longest shutdown in U.S. history [5][6].

The survey revealed widespread pessimism across all demographics, with the

(down nearly 11% from October) and the (down 2.6%) [2]. Year-over-year, these components declined 18.2% and 36.3% respectively, showing deepening concerns about both present and future economic conditions [2].

Despite the consumer confidence decline, major stock indices showed mixed performance over the past 30 days [0]:

• S&P 500
  : -0.12% (6,661.58 → 6,653.64)
• NASDAQ Composite
  : +0.17% (22,605.30 → 22,643.61)
• Dow Jones
  : +0.78% (46,306.34 → 46,669.22)
• Russell 2000
  : -2.18% (2,442.66 → 2,389.47)

This divergence between consumer sentiment and stock market performance reflects a significant

noted in the survey - consumers with significant stock holdings actually reported an [2][3].

The shutdown’s economic consequences are substantial [5][6]:

• $7-14 billion
  estimated cost to the U.S. economy through 2026
• 1.4 million federal workers
  affected (670,000 furloughed, 730,000 working without pay)
• $21 billion
  in federal wages potentially withheld if shutdown continues through December
• $400 million per day
  in missed pay according to CBO estimates

The survey showed mixed inflation signals [2]:

• 1-year inflation expectations
  : 4.7% (up from previous levels)
• 5-year inflation expectations
  : 3.6% (down 0.3 percentage points)

Survey Director Joanne Hsu noted that the decline was “widespread throughout the population, seen across age, income, and political affiliation” [2]. However, the

was evident - those with significant stock market holdings bucked the trend with an 11% sentiment improvement [2][3].

Consumer-related sectors showed weakness on November 7th [0]:

• Consumer Cyclical
  : -0.70%
• Consumer Defensive
  : +0.08%
• Technology
  : -1.45%
• Healthcare
  : -0.47%

However, major retailers showed resilience:

• Walmart (WMT)
  : +1.03% to $102.73 [0]
• Target (TGT)
  : +0.96% to $90.01 [0]

1. Consumer Spending Contraction
   : Prolonged pessimism could significantly impact holiday retail sales, potentially affecting fourth-quarter economic growth
2. Federal Worker Financial Stress
   : Growing financial hardship among 1.4 million affected workers could reduce discretionary spending across the economy
3. Supply Chain Disruptions
   : Government regulatory functions remain limited, potentially affecting business operations and commerce
4. SNP Benefit Delays
   : Food assistance recipients face uncertainty, impacting essential spending for vulnerable populations

1. Economic Data Gaps
   : Extended shutdown will create blind spots in economic policymaking, as government data collection and releases remain suspended [2]
2. Business Investment Delays
   : Uncertainty may postpone capital expenditure decisions, potentially slowing economic recovery
3. Credit Market Impact
   : Federal worker income disruptions could affect loan repayments and credit scores, with broader financial system implications

• Shutdown Resolution Progress
  : Daily political developments and budget negotiations
• Weekly Initial Jobless Claims
  : Particularly federal worker-related claims
• Retail Sales Data
  : When available, to gauge consumer spending impact
• Federal Reserve Communications
  : How central bank interprets limited economic data
• Corporate Earnings Guidance
  : Holiday season outlooks from major retailers

The unprecedented duration of this government shutdown, combined with the sharp decline in consumer confidence, presents significant challenges for the U.S. economy. The divergence between market performance and consumer sentiment highlights growing economic inequality, with stock market participants maintaining optimism while the broader consumer base faces increasing pessimism. The suspension of government economic data collection during the shutdown makes private surveys like the Michigan index particularly valuable for understanding economic conditions [2].

Users should be aware that the combination of record-low consumer confidence and the longest government shutdown in U.S. history may significantly impact fourth-quarter economic performance and create heightened volatility in consumer-sensitive sectors. The wealth divide revealed in the survey suggests that economic impacts will be unevenly distributed across different demographic groups.