Among consumers with incomes in the top third, just 29 percent expected their finances to improve during the year ahead, compared with 38 percent of middle- and lower-income households.
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The overall Sentiment Index in November turned out to be almost equal to the average during the past six months at 91.6, according to U-M economist Richard Curtin. Economists surveyed by The Wall Street Journal had predicted the final November index would edge down slightly to 93.0. The decline was mainly due to a less favorable view of the job market.
Wages have been slow to rise, and prices of necessities like medical care and shelter are climbing, eating up larger shares of workers’ paychecks. The Expectation Index rose slightly to 82.9 from 82.1 in October, but was well above the 2015 low of 78.2 in September.
A report from the Commerce Department released Wednesday showed US consumers ratcheted up savings rather than spending in October.
The expectation for inflation over the following year was 2.5 percent. Employers added 271,000 jobs in October, the most this year, and the unemployment rate fell to 5 per cent from 5.1 per cent.
If you trust this small-sample survey’s accuracy, there may be more confidence among lower income households and less confidence in higher income households.
That dive, combined with a fall in the “future expectations” component of the University of MI index, could portend a downward trajectory for consumer sentiment going forward.
Meanwhile the Bloomberg Consumer Comfort Index dropped last week to a two-month low.
For vehicles, consumers experienced a welcome combination of price discounts and low interest rates. October’s Confidence report was revised upward to 99.1. The modest increase suggests consumers could spend more over the coming holiday shopping period.
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“Few consumers thought these attacks would have an impact on the USA economy”, Curtin said in the statement.
