Consumers showed less optimism about the prospects of their own finances and the overall economy than any time in the past ten years, according to the University of Michigan’s Consumer Confidence Index.
Consumer sentiment was down 12.4% and appreciation of current economic conditions was down 15.4% year-over-year.
These downward trends have been driven particularly by high gasoline prices, which were up 50% according to the most recent data, and general inflation, which registered highs not seen in the last three decades reaching 6.2% in November.
“Consumers anticipated declining inflation adjusted incomes and expected spending cutbacks due to rising inflation to slow the pace of growth in the national economy in the year ahead,” wrote the reports authors.
They did however not expect these inflationary pressures to effect holiday spending, in line with expectations across the board of a strong holiday season.
“[There is] one important caveat: consumers have a strong desire to resume more normal holiday gatherings with family and friends, and to use their accumulated savings to fund their celebrations and gifts despite higher prices.”