US consumer sentiment rebounds in November: Reuters/UofM
Consumer sentiment toward the economy and personal finance rebounded in November, according to Reuters and the University of Michigan. The monthly indicator rose 1.9 percentage points to 75.1, beating estimates.
The report comes one day after The Conference Board said US consumer confidence fell to a seven-month low on waning job prospects. The Consumer Confidence Index fell 2 percentage points to 70.4 in November.
The Reuters/UofM report highlighted growing confidence in future conditions, especially among wealthier Americans. The gauge of consumers’ expectations increased 4.3 percentage points to 66.8. Consumer sentiment toward current conditions slipped from 89.9 to 88.0. While the overall indicator showed a slight improvement over the prior month, lower income consumers were more reserved in their appraisal.
“While rising stock prices and low interest rates will favour holiday sales of upper-end consumers, lower income households were still more concerned about job gains,” said survey director Richard Curtin. Consumers also expressed “lingering concerns over the upcoming congressional deadline for reaching a settlement on the federal budget and debt ceiling.”
Economists use consumer confidence data to gauge consumer willingness to spend, especially during the holidays. American retailers depend heavily on the holiday season for a large bulk of their revenues. Retail sales unexpectedly rose 0.4 percent in October, despite the government shutdown.
Heading into the final month of the year, dollars spent on retail goods will depend heavily on household prospects. Employment continues to be a key concern for American households, especially those in the low income thresholds.
Fewer Americans applied for unemployment benefits last week, according to the Labor Department. Initial jobless claims declined 10,000 to 316,000, suggesting fewer layoffs this holiday season. The US economy added 204,000 jobs in October, according to the Labor Department. November nonfarm payrolls are expected to be released next week.
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