Consumer Sentiment in US Rises to Highest in Seven Years
Consumer confidence climbed to a more than seven-year high in November as Americans’ views of their financial well-being improved heading into the holiday-shopping season.
The Thomson Reuters/University of Michigan final index of sentiment increased to 88.8, the highest since July 2007, from 86.9 in October. The median projection in a Bloomberg News survey of 60 economists called for the index to rise to 90.
Stronger job growth, cheaper fuel and stock prices near all-time highs are boosting household spirits as the busiest time of the year for retailers commences. Bigger wage gains would give an extra lift to consumers and probably sustain spending, which accounts for almost 70% of the economy.
“Consumers are increasingly upbeat,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. “The extreme drop in gasoline prices at the pump, which acts as a tax cut, is putting more dollars in consumers’ pockets.”
Estimates in the Bloomberg survey for the sentiment measure ranged from 88.5 to 91.5. The preliminary November reading, released Nov. 14, was 89.4. The index averaged 89 in the five years before December 2007, when the last recession began, and 64.2 in the 18-month contraction that followed.
The Michigan sentiment survey’s index of expectations six months from now inched upward to 79.9 in November from 79.6 last month.
The gauge of current conditions, which measures Americans’ views of their personal finances, increased to 102.7 in November from 98.3.
