Preliminary data released by the University of Michigan on Friday showed that consumer sentiment improved more than expected in November.
The University of Michigan said its consumer sentiment index climbed to 73.0 in November from 70.5 in October. Economists had expected the index to inch up to 71.0.
With the bigger-than-expected increase, the consumer sentiment index reached its highest level, hitting 77.2 in April.
The headline index’s advance reflected a significant improvement in consumer expectations, as the index of consumer expectations jumped to 78.5 in November from 74.1 in October.
“The expectations index surged across all dimensions, reaching its highest reading since July 2021,” said Surveys of Consumers Director Joanne Hsu.
Meanwhile, the report said the current economic conditions index edged down to 64.4 in November from 64.9 in November.
Hsu noted that the interviews for this release concluded on Monday and thus did not capture any reactions to the election results.
On the inflation front, the report said year-ahead inflation expectations slipped to 2.6% in November from 2.7% in October, hitting the lowest level since December 2020.
Long-run inflation expectations, on the other hand, inched up to 3.1% in November from 3.0 percent in October, remaining modestly elevated relative to the range of readings seen in the two years pre-pandemic.
Final Thoughts
The University of Michigan’s report showing a notable rise in consumer sentiment for November highlights a positive shift in public confidence regarding future economic conditions, with the index of consumer expectations reaching its highest level since mid-2021.
This uptick reflects optimism, possibly driven by stable employment trends and cooling inflationary pressures in the short term, as year-ahead inflation expectations declined slightly. However, the slight increase in long-term inflation expectations suggests lingering concerns about economic stability beyond the near term.
Interestingly, current economic conditions dipped slightly, hinting that while consumers feel positive about the future, they remain cautious about present economic stability.
Article Source: RTT News
