November Consumer Sentiment

Consumer confidence in November hit 69.9 according to a measure from the University of Michigan.  This exceeded forecasts and marks a solid increase from the 64.1 reading set at November’s end.  It now resides at a six-month high and bodes well for a merrier Christmas than many economists had originally expected.

The recent decline in America’s unemployment rate coupled with generally lower gasoline prices may get much of the credit for this increase.   By adding to pocketbooks in the aggregate they also combine to boost hopes for consumer spending, perhaps the most important piece in the puzzle called recovery.  Still, we remain far from those levels which coincide with a vibrant economy.  While now posting above the average 64.2 level seen during the recent 18-month recession, we are well below the 89 average which proved the norm for the five years prior to that downturn.

We can take heart that the gains here and in some of our other indicators are happening in the face of unsettling geopolitical events such as the Euro’s turmoil.  The improvements are even occurring despite Washington’s gridlock.  Perhaps I should say because of Washington’s gridlock.  Having long felt we were safest when Congress was not in session, I now wonder if the second best alternative is when they can’t actually do anything.