“Affordability Crisis”! Consumer Confidence Falls To Second Lowest Since The Pandemic, U.S. Retail Slumps

A String Of Weak Economic Indicators Is Deepening Concerns About The U.S. Economy’s Health. Retail Sales Growth Has Slowed Sharply, And Consumer Confidence Has Dropped To Its Second Lowest Level In Five Years, Signaling That Americans Are Cutting Back Spending As The Affordability Crisis Begins To Hit Consumption.

U.S. Retail Sales Rose Just 0.2% In September, Far Below Wall Street Expectations, Halting The Acceleration Seen In Prior Months. The Conference Board’s November Consumer Confidence Index Fell From 95.5 To 88.7, The Second Lowest Reading In Five Years, Only Slightly Above This April’s Level.

Rising Housing, Grocery, And Healthcare Costs Are Squeezing Low‑Income Households, While Wealthier Groups Benefit From A Strong Stock Market, Widening The Wealth Gap. The Labor Market Is Simultaneously Weakening, With September Unemployment Climbing To 4.4%, A Four‑Year High, And Wage Growth For Low‑Income Workers Slowing.

Federal Reserve Policymakers Are Weighing Whether To Implement A Third Rate Cut This Year At The December Meeting, But Last Month’s Record Government Shutdown Disrupted The Release Of Key Economic Reports, Complicating Their Assessment Of Overall Conditions.

Retail Sales Cool Sharply: The 0.2% Increase In September Retail Sales Marks A Sharp Reversal From The Momentum Of Previous Months. U.S. Census Bureau Data Missed Market Expectations, Reflecting An Emerging Contraction In Consumer Outlays.

Oliver Allen, Senior U.S. Economist At Pantheon Macroeconomics, Noted: “Core Retail Sales In September Were Much Weaker Than In Previous Months. A Stagnant Labor Market And Tariff‑Driven Price Increases Are Continuing To Drag On Real Incomes, Suggesting This Slowdown May Persist.”

Some Economists Believe That President Trump’s Import Tariffs Are Beginning To Feed Into Consumer Prices. Inflation Data Released Tuesday Showed U.S. Wholesale Prices Rose 2.7% In The Twelve Months Through September, Above Expectations, And Wholesale Prices Often Lead Consumer Price Trends.

Consumer Confidence Slides: The Conference Board’s Survey Indicates Consumers’ Short‑Term Views On Income, Business Conditions, And Labor Markets Continued To Deteriorate In November. Chief Economist Dana Peterson Said Expectations For The Labor Market By Mid‑2026 “Remain Clearly Negative,” While “Expectations For Household Income Growth Have Shrunk Significantly.”

Tim Quinlan Of Wells Fargo Observed That The 88.7 Reading Is “Far From” The 112.8 Recorded A Year Ago, Adding That “A Weak Labor Market And Ongoing Concerns About Prices” Are Weighing On Sentiment. “Both The Unemployment Rate And Consumer Confidence Are Testing Levels Not Seen Since 2021, Underscoring The Urgency Of The Recent Deterioration In Labor Market Conditions—Or At Least Consumers’ Perceptions Of Them.”

Affordability Crisis Hits Economic Confidence: Eswar Prasad, Economist At Cornell University, Warned: “U.S. Consumers Seem To Be Losing Confidence In The Economy’s Resilience, Which Could Become A Self‑Fulfilling Prophecy That Drags On Growth.” He Added: “Rising Prices, Combined With Concerns About Job Prospects And Housing Affordability, Are Clearly Undermining Household Confidence And Their Willingness To Spend Freely.”

Although Consumer Inflation Is Around 3%, Far Below The More Than 9% Peak In 2022, The Cumulative Price Increases Over The Past Five Years Have Hurt Many Americans. At The Same Time, Wage Growth For Low‑Income Workers Has Slowed, And The Labor Market Has Notably Cooled. Living‑Cost Pressures Are Hitting Low‑Income Groups Nationwide As Housing, Grocery, And Healthcare Prices Continue To Climb.

On Tuesday, President Trump Asserted At The White House Turkey Pardon Ceremony That Prices Are Falling, Despite Data Showing The Opposite. “This Thanksgiving, We Are Making Incredible Progress In Making America Affordable Again,” Trump Said. “We Have Fallen To Levels Not Seen In A Long Time.”

These Remarks Drew Criticism, Including From Within His Party. Former Trump Loyalist Representative Marjorie Taylor Greene Harshly Criticized Him For “Manipulating” Voters On Prices And Announced Last Week That She Would Resign From Congress.

Federal Reserve Faces A Test: Federal Reserve Policymakers Are Considering A Third Rate Cut Of The Year At The December Meeting. Last Month’s Record Government Shutdown Prevented The Release Of Key Reports, Complicating Their Ability To Gauge The Economy’s Health.

The Labor Market Is Showing Increasing Signs Of Strain. September’s Unemployment Rate Reached 4.4%, A Four‑Year High, While Hiring Has Been Weak For Much Of The Year. Wage Growth For Low‑Income Workers Has Slowed Alongside The Labor Market’s Sharp Cooling, Further Eroding Consumer Purchasing Power.

These Factors Together Are Testing The Fed’s Capacity To Balance Support For Economic Growth With The Need To Control Inflation.