Consumer sentiment unexpectedly surged higher in November, according to data released Friday by the University of Michigan.
The University of Michigan’s survey of consumers produced a final November read of 96.8, the highest reading since July. Economists had expected a dip to 94.9 from the prior reading of 95.7.
The improved reading bring consumer sentiment back in line with its historically high average since 2017. The slowdown scare of the past summer, which had showed up in the consumer sentiment numbers with a sharp drop in August, is now definitively in the rearview mirror.
“In 30 of the past 35 months the Sentiment Index was 95.0 or higher, a level of optimism second only to when the Index was above 100.0 for 34 out of 36 months from January 1998 to December 2000, averaging 106.0,” Richard Curtin, the survey’s chief economist, said.
Expectations pushed up the index, reflecting confidence in future income gains all across the income distribution. Consumers’ assessment of current conditions dipped a bit but remains at an elevated level.
“Personal spending will be energized by record favorable evaluations by consumers of their personal financial situation, with gains expected across the entire income distribution, net increases in household wealth, the renewed appeal of price discounting, and reduced mortgage rates,” Curtin said.
So what about impeachment? It has not had a noticeable effect on the overall numbers but a partisan divide on expectations has sharpened.
“One side anticipates a recession, while the other side expects an uninterrupted expansion in the year ahead,” Curtin said.