Consumer sentiment improves in November as inflation expectations ease
Michigan's preliminary index rises to 51.0, but high prices still weigh on households. Interviews ended before Election Day.
U.S. consumer sentiment improved in early November, while households' inflation expectations eased, according to the University of Michigan's preliminary survey released Friday. The headline index rose to 51.0 from October's final reading of 48.0.
The improvement does not erase the pressure consumers describe. Survey director Joanne Hsu said cost-of-living concerns still dominated respondents' comments. About 57% spontaneously mentioned that high prices had eroded their living standards, the highest share since May.
Inflation expectations move lower
Year-ahead inflation expectations fell to 4.3% from 4.7% in October. Long-run expectations edged down to 3.4% from 3.5%. These are consumers' expectations for future price increases, not a reading of actual inflation.
The survey's current economic conditions index rose to 51.0 from 46.7, while its expectations index increased to 50.9 from 48.8. Hsu said modest improvements in expected personal finances and business conditions were concentrated primarily among independents.
The interviews came before Election Day
Interviews ran from October 20 through November 2. That timing matters: the release should not be read as a completed assessment of households' reactions to the election results. The final November reading is scheduled for November 20.
Hsu said sentiment improved among lower- and middle-wealth consumers but fell 5% among those with the largest stock portfolios. Respondents also expressed growing anxiety about a possible AI bubble, although those worries were much smaller than concerns about the cost of living.
The report leaves a mixed picture for investors: consumers feel better than in October and expect somewhat slower price increases, but affordability remains a constraint. Sentiment was still 10% below February's level. A survey of attitudes is useful context for the consumer economy; it is not a direct measure of retail sales or a promise of stronger spending.
