November Consumer Sentiment

The University of Michigan reported Consumer Sentiment experienced a respectable jump from October’s 73.2 level to 75.1 in November. While this appears to be good news on the surface, there are three major components that make up this report, and they had a mixed showing.

The first, current conditions, actually fell from 89.9 in the prior month to 88.0, seen generally as just slightly softer. The confusing situation in Washington D.C. likely continued to play at least a minor role in that weakness.

Expectations, the second component, showed strength, growing from 62.5 at October’s end to 66.8 as November closed. This may demonstrate to some extent how quickly attitudes can recover when our government actually does something, even if it is just a short-term patch.

Inflation expectations, the final ingredient, held a steady outlook at 2.9% for both a one and five year time frame.

What we take away from this report here at Atlas is that sentiment is a mild positive (at best) and that expectations for robust holiday sales and/or an improving employment picture are not deeply rooted. We can only hope that the current muddle-through economy maintains a slight upward bias in its struggle toward full recovery. (by J R)