US Consumers’ Inflation Outlook Slides for 3rd Straight Month: University of Michigan

While indicators suggest affordability is improving, surveys continue to highlight that households are worried about day-to-day costs.

Andrew Moran

Published: 11/21/2025, 4:45:22 PM EST

US Consumers’ Inflation Outlook Slides for 3rd Straight Month: University of Michigan — Shoppers at a grocery store in Centreville, Va. on Nov. 2, 2025. (Madalina Kilroy/The Epoch Times)

U.S. consumers’ inflation expectations for the year ahead declined for the third consecutive month in November, according to the University of Michigan’s widely watched survey released Nov. 21.

The one-year inflation outlook slowed to 4.5 percent, down from the preliminary estimate of 4.7 percent—the lowest level since July.

Five-year inflation expectations fell to a four-month low of 3.4 percent from 3.9 percent in October.

While Americans’ inflation forecasts have eased, consumers are still worried about persistently high prices, said Joanne Hsu, director of consumer surveys at the University of Michigan.

“Despite these improvements in the future trajectory of inflation, consumers continue to report that their personal finances now are weighed down by the present state of high prices,” Hsu said.

Broad-based price inflation has remained a consistent challenge for the country since the pandemic. While indicators suggest affordability is improving, surveys continue to highlight that households are worried about day-to-day costs.

The September Consumer Price Index report revealed that the headline annual inflation rate was 3 percent, the highest since January.

The Bureau of Labor Statistics confirmed that the October inflation report has been canceled, and the November data will not be released until mid-December.

Frustrations over the cost of living have weighed on consumer sentiment, Hsu said.

The November Consumer Sentiment Index declined 4.9 percent to 51 and has cratered 29 percent from a year ago. Current economic conditions also tumbled 13 percent to 51.1, but consumer expectations rose more than 1 percent to 51.0.

Current personal finances and buying conditions for durables each plummeted more than 10 percent, but expectations for the future improved.

The record-breaking federal government shutdown had initially dragged consumer sentiment in the preliminary survey. Once the spending impasse ended, sentiment improved from the mid-month reading.

“Consumers remain frustrated about the persistence of high prices and weakening incomes,” Hsu said.

Additionally, consumers with the largest stock holdings registered weaker sentiment, “likely a consequence of the stock market declines over the past two weeks.”

Wall Street has witnessed immense volatility this month, including the surprise selloff on Nov. 20. However, the Nov. 21 trading session has generated substantial gains across the leading benchmark averages, with the blue-chip Dow Jones Industrial Average rallying about 500 points, or 1.1 percent.

Inflation Trajectory

Now that economic observers will be starved of another batch of inflation data, they will turn to alternative sources to determine what is happening to consumer prices.

One of these is the Truflation U.S. Inflation Index—a running real-time estimate that relies on a treasure trove of data points—which shows the annual rate at 2.41 percent.

Shoppers at a grocery store in Centreville, Va., on Nov. 2, 2025. (Madalina Kilroy/The Epoch Times) — Shoppers at a grocery store in Centreville, Va., on Nov. 2, 2025. Madalina Kilroy/The Epoch Times

Meanwhile, market watchers are divided on whether President Donald Trump’s global tariffs are contributing to inflation.

Bill Simon, former Walmart U.S. CEO, told CNBC's “Fast Money” on Nov. 20 that there is "almost no indication of any inflation" in the retail giant’s latest earnings report.

The company said its own basket of goods has cooled to about 1 percent in the latest quarter, “and that's really, really a good indicator for the rest of the economy,” Simon added.

Walmart shares rallied about 6 percent on Nov. 20 after the company reported a 4.5 percent increase in same-store sales and raised its full-year earnings and sales outlook.

Cost-conscious shoppers are turning to Walmart in pursuit of deals, said Eric Clark, CIO at Accuvest.

“More and more consumers are turning to Walmart for deals when they’re feeling the pinch of inflation,” Clark said in a note emailed to The Epoch Times.

That said, the holiday season may be a little more expensive this year, new research shows.

Bankrate's 2025 Holiday Essentials Index, released on Nov. 20, found that 78 percent of Christmas staples are more expensive than they were a year ago.

“Only 11 of the 50 holiday essentials Bankrate tracks are cheaper than they were a year ago—roughly half as many as last year, when 21 items fell in price,” the report stated.

Amid the myriad barometers, Dallas Federal Reserve President Lorie Logan believes inflation is still “too high.”

“While inflation has come down significantly from the post-pandemic peak, it’s still not convincingly headed all the way back to 2 percent,” Logan said in a speech at a central bank conference on Nov. 21. “I remain concerned about the trajectory of underlying inflation, even after accounting for temporary factors that affect prices in the near term.”

Following volatility in the futures market, investors now think the Federal Reserve will lower interest rates at the conclusion of next month’s two-day Federal Open Market Committee policy meeting.

From The Epoch Times