November Consumer Sentiment

Consumers’ attitudes continued to improve in November according the Reuters/University of Michigan’s most recent reading of consumer sentiment.  The reading of 64.1 compares favorably to October’s 60.9 end of month tally.  The trend for the year has been down after a peak reading in February and is down 10.5 percent year-over-year, but the indicator has been improving since putting in a 30 year low in the middle of August.

With the improvement coming off of such a low base, the details of the survey still leave many things to be desired.  Personal finances continue to stagnate.  For the 48th consecutive month, more households reported that their finances worsened rather than improved, and only 22 percent expect their situation to improve in the next twelve months.  The nation is not happy with the leadership of the country either.  The majority gave unfavorable ratings of the Obama administration for the 4th month in a row; and for the second consecutive month, the Federal Reserve received demerits from the majority.

The financial crisis of 2008-09 did a number on consumers’ outlook.  The slow recovery kept the attitudes suppressed.  Now it is the leadership crisis that has Americans worried.   The survey’s 30 year low in August came during the congressional debate on the debt ceiling which was ultimately pushed to a super-committee, and they came up short on solutions.  All of this is against a backdrop of economic and political uncertainty around the rest of the world.  It is hard to imagine the outlook materially improving in the near future, but that is just one consumer’s sentiment.  (by Christopher Cox)