A sudden negative signal emerged from the US consumer sector.
On November 21, Eastern Time, data released by the University of Michigan showed that the final reading of U.S. consumer confidence in November fell to 51 from 53.6 in October. The current conditions index dropped 7.5 points to 51.1, a record low. U.S. consumers' expectations for their personal finances have fallen to their lowest level since 2009.
Meanwhile, the consumer sector in the US stock market has continued to suffer a sell-off. According to a recent report by Bespoke, since October, the US consumer staples sector has fallen three times the size of the S&P 500, while the consumer discretionary sector has fallen by 5.2%, making it one of the worst-performing sectors in the US stock market during this period.
A rare scene unfolded in the US stock market.
In its latest report, renowned research firm Bespoke points out that if the US stock market closes this Thursday, it will be the first time since 1990 that the consumer discretionary sector has been the worst performing of the 11 sectors in the S&P 500, and also the only time that both the consumer discretionary and consumer staples sectors have been the two weakest performing sectors in the market.
According to Bespoke's statistics, neither of these two consumer sectors has led the market since 2025, and both have continued to decline sharply since the start of the longest government shutdown in US history in early October.
The Bespoke team points out that since October, the consumer staples sector has fallen three times as much as the S&P 500, while the consumer discretionary sector has fallen by 5.2%, making it one of the worst-performing sectors in the US stock market during this period.
It is worth noting that historically, the stock performance of the consumer staples sector has often contrasted with that of non-essential consumer goods and services companies. Consumer staples stocks cover necessities that consumers will buy and use regardless of economic conditions, and are therefore usually regarded as defensive stocks that help hedge portfolio risk; while non-essential consumer goods stocks have cyclical characteristics because consumers tend to reduce spending during periods of economic slowdown or recession.
Therefore, these two sectors rarely fluctuate in sync in the past, but this year they have moved in sync for the first time.
The Bespoke team stated, "Consumer spending accounts for approximately 70% of the total US economy, therefore, although the market is currently focused on Nvidia..." While AI business and financial performance are important, from an economic perspective, consumer activity is the more crucial variable.
Bespoke analysts acknowledge that the stock market and the economy are not necessarily perfectly synchronized, and the weakness in the consumer sector may simply be a valuation reset. However, they also added, "Policymakers should not ignore this signal—especially when you agree with the market's forward-looking perspective."
Falling to historic lows
On November 21, Eastern Time, the final reading of consumer confidence for November fell to 51 from 53.6 in October, only slightly higher than the preliminary reading. The current conditions index dropped 7.5 points to 51.1, a record low.
Facing multiple pressures, consumers' assessment of their current personal finances has declined by approximately 15%. The proportion of consumers who automatically cited the negative impact of high prices on their personal finances rose for the fifth consecutive month, reaching 47%. Consumer expectations for the job market have also deteriorated further. 69% of consumers expect the unemployment rate to rise in the coming year, up from 64% in October and more than double the 32% in November last year.
Joanne Hsu, director of the University of Michigan's consumer survey, said consumers are frustrated by persistently high prices and shrinking incomes. In the first half of November, consumers were also impacted by the record-breaking government shutdown, which disrupted food assistance, air travel, and affected the payroll of a large number of federal employees.
It is worth noting that concerns about the US economy are spreading to the job market. Data released by the US Department of Labor on the 20th showed that the US unemployment rate rose to 4.4% in September, the highest level since July 2020.
Unemployment Insurance The number of continuing claims rose to a four-year high earlier this month, indicating that it is becoming increasingly difficult for unemployed Americans to find work.
Although Americans’ inflation concerns have eased somewhat, they remain anxious about the high cost of living and job security.
The University of Michigan report also mentioned the widening income gap in the United States.
Joanne Hsu points out: "The wealthiest consumers appear to still be able to maintain their spending, while the financial situation of households without equity assets is deteriorating. These trends suggest that overall economic data may be masking the vulnerability of certain groups."
Consumer pessimism about the near-term U.S. economic outlook has intensified. The purchasing power index for large durable goods has fallen to a record low.
(Source: Securities Times)
