Americans are feeling worse about the state of the US economy.
The preliminary reading on consumer sentiment in November from the University of Michigan showed the index came in at 60.4 this month, well below the 63.7 expected by economists and the lowest for the measure since May. Friday's reading also marked the fourth straight month of declines.
"While current and expected personal finances both improved modestly this month, the long-run economic outlook slid 12%, in part due to growing concerns about the negative effects of high interest rates," Surveys of Consumers director Joanne Hsu said in the release. "Ongoing wars in Gaza and Ukraine weighed on many consumers as well."
Notably, consumer expectations for long-run inflation ticked up to a level not seen since 2011. Consumers now see inflation at 3.2% over the next five years, a move up from the 3% seen as of last month.
Expectations for gas prices also rose to their highest levels of the year.
The move up in inflation expectations comes as the Federal Reserve has reiterated over the last week that inflation has "a long way to go" to reach the Fed's long-term goal of 2%.
Inflation as tracked by the Consumer Price Index (CPI) has grown stagnant in recent months, with prices increasing 3.7% annually in both August and September.
The October CPI report is expected out on Nov. 14. Economists forecast inflation rose 3.3% over the prior year in October.
Meanwhile, the Fed's preferred inflation measure, "core" PCE, which strips out volatile categories such as food and energy, registered the biggest monthly gain since May last month, though annual price increases continued to slow.
Fed Chair Jerome Powell described these moves in inflation as "favorable," but noted they aren't enough to declare victory in the fight against inflation. "A few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal," Powell said in a press conference on Nov. 1.
Earlier this week, several Fed officials, including Powell, noted that more interest rate hikes may be needed in order to keep inflation on its downward path. Speaking at an IMF event on Thursday, Powell said, "If it becomes appropriate to tighten policy further, we will not hesitate to do so."
Elsewhere on Thursday, Richmond Fed President Thomas Barkin said he's not convinced policy is currently restrictive enough. He highlighted that "shelter and services inflation remain higher than historical levels."
"Whether a slowdown that settles inflation requires more from us remains to be seen," Barkin said.
Josh Schafer is a reporter for Yahoo Finance.
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