November Consumer Sentiment Edges Down

Preliminary November consumer sentiment edged down to 97.8 from October's final reading of 100.7. Both current conditions and consumer expectations readings were lower. The losses however, were quite small as the sentiment index remained at its second highest level since January. Current conditions declined to 113.6 from 116.5 while expectations slid to 87.6 from 90.5. One year inflation expectations increased to 2.6 percent from October's 2.4 percent while five year expectations were unchanged at 2.5 percent.

Consumers (and policy makers) have four key concerns: prospective trends in jobs, wages, inflation and interest rates. An improving labor market was spontaneously mentioned by a record number of consumers in early November, and anticipated wage gains recorded their highest two-month level in a decade. These favorable trends were countered by a slight rise in year-ahead inflation expectations and a growing consensus that interest rates will increase during the year ahead.

Recent History Of This Indicator:
Underpinned by high employment and rising income prospects, the consumer sentiment index jumped in the preliminary October report to 101.1 for the best showing in 13 years before ending the month nearly as high, at 100.7. Econoday's consensus for preliminary November is 100.0.