Americans appear to be confident their income will continue to rise and the economy will keep improving.
US consumer confidence climbed to a seven-month high in early November, boosted by Americans’ optimism about the future of the economy and their finances, according to a report from Bloomberg.
The University of Michigan’s preliminary November sentiment index advanced to 73, exceeding all but one estimate in a Bloomberg survey of economists, according to the report. The group’s expectations index surged to 78.5, the highest level since mid-2021, data showed.
The upbeat picture also appeared to show Americans expect inflation to continue to slow. Consumers expect prices will climb 2.6% over the next year. That would be the lowest since 2020. One less-optimistic sign: Expectations for average price gains over the next five to 10 years, climbed to 3.1%.
The preliminary survey was conducted Oct. 22 to Nov. 4, the day before Americans re-elected Donald Trump as president.
“Consumers have consistently expressed that the future of the economy is contingent on who wins the presidential election,” Joanne Hsu, director of the survey, told Bloombrrg. “Going forward, the impact of the next administration’s economic policies on inflation are likely to be top of mind for consumers and drive the trajectory of their confidence in the performance of the economy.”
According to the report, U-M’s gauge of expected personal finances strengthened to the highest since March, in part due to improved income prospects. Confidence about long-run business conditions jumped to an almost four-year high.
Hsu said despite Americans’ frustration with high prices, “consumers have felt increasingly assured about the trajectory of the economy, with rising expectations for labor markets.”
