U.S. consumer sentiment advances to highest level since April
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U.S. consumer sentiment climbed to a seven-month high in early November, boosted by Americans’ optimism about the future of the economy and their finances.
The University of Michigan’s preliminary November sentiment index advanced to 73, exceeding all but one estimate in a Bloomberg survey of economists. The group’s expectations index surged to 78.5, the highest level since mid-2021, data showed Friday.
The upbeat picture also reflected Americans’ forecasts for slower inflation. Consumers expect prices will climb 2.6% over the next year, the lowest since 2020. Expectations for average price gains over the next five to 10 years, however, inched higher to 3.1%.
The preliminary survey was conducted Oct. 22 to Nov. 4, just before Americans re-elected Donald Trump as president.
“Consumers have consistently expressed that the future of the economy is contingent on who wins the presidential election,” Joanne Hsu, director of the survey, said in a statement. “Going forward, the impact of the next administration’s economic policies on inflation are likely to be top of mind for consumers and drive the trajectory of their confidence in the performance of the economy.”
Hsu said respondents were split on who they believed would win the election, noting some will be updating their views in light of the election results.
The university’s gauge of expected personal finances strengthened to the highest since March, in part due to improved income prospects. Confidence about long-run business conditions jumped to an almost four-year high.
Hsu said despite Americans’ frustration with high prices, “consumers have felt increasingly assured about the trajectory of the economy, with rising expectations for labor markets.”
The gauge of current conditions edged lower to 64.4, as did the university’s measure of buying conditions for durable goods.