Consumer Sentiment Falls Back In November

Consumer sentiment fell back in the last half of November to a final reading of 91.3 vs a mid-month flash of 93.1. Though November's final is higher than the 90.0 final in October, the implied reading for the last two weeks is in high 80s/low 90s area and do, unfortunately, point to a possible effect from the Paris attacks. Like yesterday's very disappointing consumer confidence report, weakness is centered in expectations with this component at 82.9 vs 85.6 for November's flash. The implied reading here over the last two weeks is in the high 70s area which is noticeably below the mid-80s trend.

But in a positive that points to no immediate effect on consumer spending, the current conditions component shows much less weakness, down only 5 tenths from the flash at 104.3. Inflation readings are up from mid-month but little changed from October, at 2.7 percent for the 1-year outlook, which is unchanged from October, and at 2.6 percent for the 5-year outlook which is up 1 tenth from October.

Consumer confidence readings are elusive indicators, often showing a sensitivity to news events that does not pan out to actual spending behavior. Still, readings are going down and could become an outside global effects factor for the December FOMC.

Recent History Of This Indicator:
Consumer sentiment is expected to hold onto its early November gains, at 93.1 for the final reading of the month and once again the strongest result since July. Expectations were on the rise early in the month as was the assessment of current conditions. But watch for inflation readings in this report which have been weak and could become a factor for the December FOMC.