U.S. consumer sentiment moved higher than expected, the University of Michigan’s survey of consumers showed Friday.
After advancing in August and September, economists had expected the preliminary reading of the University of Michigan’s consumer sentiment index to hold nearly steady, ticking up to 80.5 from last month’s 80.4. Instead, it climbed to 81.2.
Despite the decline from the very high levels in this index that held for Trump’s first three years, it is still above the average reading of 79 for the Obama administration.
The increase was led by a rise in the expectations component to 78.8 from 75.6 in September. That was much better than expected. The current conditions gauge dipped to 84.9 from 87.8, which may reflect the rise in layoffs in the first week of the month and the stalling of stimulus talks between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin. As well, infections have been rising in recent weeks.
“Slowing employment growth, the resurgence in COVID-19 infections, and the absence of additional federal relief payments prompted consumers to become more concerned about the current economic conditions,” the survey’s chief economist Richard Curtin said. “Those concerns were largely offset by continued small gains in economic prospects for the year ahead.”
Biden’s lead widened in the survey’s poll about the presidential race. Instead of asking voters who they will vote for or who they support, the survey asks consumers who they expect to win. Biden’s lead grew to seven percentage points in early October from just 1 point in July.
This was in part driven by increased confidence among Democrats who think Biden will win—up 8 points—and declining confidence among Republicans—down 5 points.
Trump, however, has a slight advantage with independents.
“Most elections are decided by those who are non-aligned with either party; the views of Independents remained unchanged and nearly equal, giving Trump a slight advantage of 2 or 3 points,” Curtin said.