Consumer sentiment index creeps higher at end of November
The numbers: Consumer sentiment improved slightly near the end of November, but Americans are more worried about the economy and think inflation is far from defeated.
The final reading of the sentiment survey edged up to 61.3 from 60.4 in early November, the University of Michigan said Wednesday. Still, the index has fallen four months in a row to a six-month low.
The consumer-sentiment survey reveals how consumers feel about their own finances as well as the broader economy.
The pessimism of Americans doesn’t seem to jibe with extremely low unemployment, high job openings, falling gas prices and a recent rise in inflation-adjusted incomes.
Yet even though inflation is slowing, prices of goods and services are up 18% compared to three years ago. And now higher borrowing costs are adding to the economic stress.
Key details: A gauge that measures what consumers think about the current state of the economy rose to 68.3 from a preliminary 65.7, perhaps because of a big rebound in the stock market.
A measurement of expectations for the next six months fell a hair to 56.8 from an initial 56.9, however. Americans’ view of long-run business conditions sank to the lowest level in almost a year and a half.
Americans think inflation will average 4.5% in the next year, up from 3.2% in September. That’s the highest reading since April.
The official rate of inflation right now is 3.2%, using the consumer-price index.
Big picture: The economy has shown fresh signs of weakness after a surprisingly strong surge in growth in the third quarter.
Economists also predict a more muted holiday shopping season as high inflation and rising borrowing costs take their toll.
The economy has shown lots of resilience, however, and avoided a widely predicted recession.
Looking ahead: “Consumers appear worried that the softening of inflation could reverse in the months and years ahead,” said Joanne Hsu, director of the survey.
Market reaction: The Dow Jones Industrial Average and the S&P 500 rose in Wednesday trading.