Indeed, overall sentiment among Republicans surged by 15.5 points, the largest increase since Trump won the 2016 election. It plunged 10.1 points among Democrats in the wake of the loss by Vice President Kamala Harris, their party’s nominee. It also ticked down among political independents, whom exit poll data from Edison Research showed narrowly favored Harris over Trump. The University of Michigan’s Consumer Sentiment Index pci etf technical analysis climbed to 71.8 this month, the highest since April, from 70.5 in October.
How Investors Can Use the CSI
About 60% of each monthly survey consists of new responses, and the remaining 40% is drawn from repeat surveys. The repeat surveys help reveal the changes in consumer sentiment over time and provide a more accurate measure of consumer confidence. The survey also attempts to accurately incorporate consumer expectations into behavioral spending and saving models in an empirical fashion. The Michigan CSI has grown from its inception to be regarded as one of the leading indicators of consumer sentiment in the United States.
Consumer Sentiment is Improving, But Fell Short Of Post-Election Bump Expectations
On balance, consumer views remain on an upward trajectory; sentiment is now more than 40% above the June 2022 trough, though it remains well below pre-pandemic readings. Current Economic Conditions decreased from 64.9 in October to 63.9 in November, while Index of Consumer Expectations increased from 74.1 to 76.9. According to the report, the Expectations index surged for brokerage firm financial definition of brokerage firm Republicans and fell for Democrats as they reacted to the results of presidential elections.
- The survey also showed that consumers’ long-range inflation expectations of five years ahead ticked higher, remaining well above the pre-pandemic range.
- With considerable uncertainty on the horizon from continued conflict in the Middle East and the looming election, these differences in perceptions may persist, Hsu said.
- The Current Index fell to 63.9, down from 64.9 in October and below last November’s 68.3.
- The most recent retail sales report showed that consumers continued to surprise with their spending levels, though some interest-rate-sensitive categories moved lower, including automobiles and furniture.
- While higher-income households expect particularly strong income growth in the coming year, consumers overall remain extremely frustrated by the persistence of high prices, Hsu said.
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It has come to be included in the larger index of Leading Composite Indicators published by the Bureau of Economic Analysis (BEA) through the Department of Commerce.
The increase in the long-run inflation expectations mirrors the recent moves in the Treasury markets. The yield of 10-year Treasuries increased from relationship between bond yields and stock investing 3.70% in early October to 4.42%, while the yield of 30-year Treasuries grew from 4.05% to 4.60%. With regard to inflation expectations, the University of Michigan said year-ahead inflation expectations edged down to 2.6 percent in November from 2.7 percent in October, hitting the lowest level since December 2020. Less than one-third of consumers expect unemployment rates to rise in the year ahead, compared with 41% a year ago. For the second consecutive month, there was a broad consensus of higher sentiment across age, income, education and geography.
The Consumer Sentiment Index rose to 71.8 in the November 2024 survey, up from 70.5 in October and above last November’s 61.3. The Current Index fell to 63.9, down from 64.9 in October and below last November’s 68.3. The Expectations Index rose to 76.9, up from 74.1 in October and above last November’s 56.8. “All year, consumers have repeatedly told us that the trajectory of the economy hinges on who becomes the next president,” Hsu said. “Given the tightness of the race in its final weeks, consumers were fully aware that the result could go either way. The Consumer Sentiment Index rose to 70.5 in the October 2024 survey, up from 70.1 in September and above last October’s 63.8.
The Expectations Index fell to 76.0, down from 77.4 in March and above last April’s 60.6. Sentiment has remained essentially unchanged since January 2024, continuing the plateau that followed the large gains seen at the end of 2023, according to the University of Michigan Surveys of Consumers. The Consumer Sentiment Index rose to 79.0 in the January 2024 survey, up from 69.7 in December and above last January’s 64.9. The Expectations Index rose to 77.1, up from 67.4 in December and above last January’s 62.6. With considerable uncertainty on the horizon from continued conflict in the Middle East and the looming election, these differences in perceptions may persist, Hsu said. The Index of Consumer Expectations (ICE) was created as a subsidiary survey of the MCSI.
