US consumer sentiment in November exceeds expectations... “Improvement of independent consumer sentiment”
Despite a slight easing of inflation concerns, the feeling of high inflation still persists, and sentiment among the upper class holding stocks deteriorates by 5%.
Quick Look
- The University of Michigan's preliminary consumer sentiment index for November was 51.0, up 6% from 48.0 the previous month and exceeding the market forecast of 47.5.
- Expected inflation for the next year fell to 4.3%, but 57% of respondents responded that their standard of living has fallen due to high prices.
- Sentiment among the top tier of stock holdings fell 5% due to market volatility.
AI-generated summary
Why It Matters
The provisional consumer sentiment index for November announced by the University of Michigan increased compared to the previous month, and both the current economic conditions index and consumer expectations index also rose. Concerns about inflation have eased slightly, but remain at a high level.
The economic sentiment of U.S. consumers improved in November, exceeding market expectations.
The University of Michigan announced on the 6th (local time) that the preliminary value of the consumer sentiment index for November, which reflects consumers' confidence in the economy, was 51.0.
This is a 6% increase compared to the previous month (48.0). It also exceeded the expert forecast of 47.5 compiled by Dow Jones.
The current economic conditions index, which reflects the current economic situation, rose from 46.7 in October to 51.0 in November, and the consumer expectations index, which reflects future prospects, rose from 48.8 to 50.9 during the same period.
Concerns about prices have also eased slightly.
US consumers' inflation expectations for the next year fell from 4.7% in October to 4.3% in November. Although it is the lowest level since August, it is significantly higher than the 3.4% in February before the outbreak of the US-Iran war.
Five-year inflation expectations, which reflect consumers' long-term inflation expectations, also fell from 3.5% to 3.4% over the same period.
Director Joan Shu, who oversees the tally, said, "Slight improvements were seen in several areas, including personal financial outlook and business management conditions outlook," and added, "The improvement was mainly concentrated among consumers who tend to be independent."
By wealth level, consumer sentiment in the lower and middle wealth classes rose, while sentiment among those with the most stock holdings fell 5% in the wake of the recent relatively high volatility in the stock market, Director Shu explained.
It appears that anxiety about the artificial intelligence (AI) bubble is growing among consumers. However, these concerns are much smaller than concerns about the cost of living, he added.
In fact, about 57% of respondents mentioned that their standard of living has been lowered due to high prices. This is the highest figure since May.
What to Watch
AI outlook — possibilities, not facts
There is a possibility that expected inflation will decline further in the next year.
Possible · Within months
Open Questions
- Whether the improvement in consumer sentiment index will lead to an increase in actual consumer spending
- The specific impact of AI bubble anxiety on future investment behavior
- Policy response plan to alleviate high inflation
