(Nov 6): US consumer sentiment rose in November to a three-month high, bolstered by modest improvements in Americans' views of their personal finances and the economic outlook.
The University of Michigan’s preliminary sentiment index increased to 51 in November from 48 in October, according to the survey released Friday. The median estimate in a Bloomberg survey of economists projected sentiment to hold at 48.
The improvement was concentrated among independents, who reported the strongest consumer sentiment in more than a year. Sentiment across both Democrats and Republicans deteriorated.
Cost of living concerns remain top of mind for many Americans. About 57% of respondents spontaneously mentioned that high prices had eroded their living standards — the highest since May.
Despite limited lay-offs and strong economic growth, household finances have been squeezed as prices rise faster than wages. Democrats’ decisive victory in the midterm elections reflected deep voter frustration with the economy, particularly the high cost of food, gasoline and housing.
Inflation expectations in the year ahead improved but remained elevated. Consumers expect prices to rise 4.3% over the next year, a three-month low. They also saw costs climbing at an annual rate of 3.4% over the next five to 10 years, also a step down from the prior month.
In addition to inflation worries, “consumers’ comments revealed growing anxiety over a possible AI bubble,” Joanne Hsu, director of the survey, said in a statement.
“The personal finances of consumers with the largest stock portfolios dropped 12% this month to their lowest reading since April, likely due to agitation in stock values in recent weeks, while all other wealth groups saw modest improvements,” she added.
A gauge of current personal finances climbed to a four-month high in November, while Americans' views of buying conditions for durable goods rebounded from a record low.
Gauges of current and expected conditions both rose to the highest since August.
The survey period includes responses from Oct 20 to Nov 2.
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