Michigan Consumer Sentiment Falls 5% in November
The November Final Report came in at 56.8, down 3.1 (5.2%) from the October Final. Investing.com had forecast 55.0. Since its beginning in 1978, consumer sentiment is 34 percent below the average reading (arithmetic mean) and 33 percent below the geometric mean.
Surveys of Consumers chief economist, Richard Curtin, makes the following comments:
Consumer sentiment fell 5% below October, offsetting about one-third of the gains posted since the historic low in June. Along with the ongoing impact of inflation, consumer attitudes have also been weighed down by rising borrowing costs, declining asset values, and weakening labor market expectations. Buying conditions for durables, which had markedly improved last month, decreased most sharply in November, falling back 19% to its September level on the basis of high interest rates and continued high prices. Long-term business conditions declined a more modest 6%, while short-term business conditions and personal finances were essentially unchanged.
Inflation expectations were also little changed from October. The median expected year-ahead inflation rate was 4.9%, down slightly from 5.0% last month. Long run inflation expectations, currently at 3.0%, have remained in the narrow (albeit elevated) 2.9-3.1% range for 15 of the last 16 months. Uncertainty over these expectations remained at an elevated level, indicating that the general stability of these expectations may not necessarily endure. [More...]
See the chart below for a long-term perspective on this widely watched indicator. Recessions and real GDP are included to help us evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.