The presidential election did little to change overall trends in consumer views as consumer sentiment lifted for the fourth consecutive month, inching up to its highest reading since April 2024. Consumers said they see inflation getting worse over the next year, anticipating an inflation rate of 3.5%, up from 3.2% in last month’s survey and above the average range seen prior to the pandemic. The survey also showed that consumers’ long-range inflation expectations of five years ahead ticked higher, remaining well above the pre-pandemic range. The worsening sentiment on price pressures come as inflation readings have continued to move higher in 2024.
President Ono’s Monthly Message – October 2024
“Over the last two months, consumers have finally felt assured that their worst fears for the economy would not come to pass. Over the last two months, sentiment has climbed a cumulative 29%, the largest two-month increase since 1991 as the First Gulf War and a recession ended. Sentiment has now risen nearly 60% above the all-time low measured in June 2022 and is now 7% shy of the historical average reading since 1978. These patterns reflect the two groups’ contrasting views on how Trump’s policies will influence the economy. Unemployment expectations improved slightly from last month and sit near its historical average.
Seasonal Transitions and Climate Change
The Index of Consumer Expectations (a sub-index of ICS) is included in the Leading Indicator Composite Index published by the U.S. The Michigan Consumer Sentiment Index has provided a relatively accurate forecast of future consumer confidence and spending for the past several decades. For more information about the Michigan CSI and its impact on economic analysis, consult your investment advisor or log on to the Surveys of Consumers, University of Michigan website.
Companies that provide consumer goods often reap the initial fruits of improved consumer sentiment. Consumers who feel more confident about the economy generally also feel better about their employment prospects and are therefore more willing to buy houses, cars, appliances, and other items. Investors should look at the stocks of car manufacturers, home builders, and other retailers that typically see sales rise when the economy begins an expansion period. The survey showed one-year inflation expectations at 2.6%, the lowest since December 2020, but five-year expectations rose to 3.2%, the highest in a year, from 3.0% in October. Many economists see a risk of rekindled inflation arising from Trump’s economic agenda of tax cuts, higher tariffs and restricted immigration. (Reuters) – U.S. consumer sentiment ticked up for a fourth straight month in November, led by a big upswing in sentiment among Republicans following Donald Trump’s victory in the presidential election.
The CSI’s Impact
- About 38% of consumers blamed high prices for eroding their living standards, up from 33% last month.
- 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.
- History shows that consumer confidence has been at its lowest point just prior to and in the midst of recessionary periods.
- 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 survey showed similar declines when consumers were asked about their current economic conditions and on their expectations of future business conditions.
He is a specialist in most traded сryptocurrency pairs – best pairs to trade stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading. The report indicated that Michigan Consumer Sentiemnt increased from 70.5 in October to 71.8 in November, compared to analyst forecast of 73.7. While the downward revision surprised economists, who had expected the reading to be upwardly revised to 73.7, the index is still above the final October reading of 70.5. The Consumer Sentiment Index fell to 77.2 in the April 2024 survey, down from 79.4 in March and above last April’s 63.7.
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About 44% of consumers mentioned that high prices are eroding their living standards, little changed from the past six months. For homebuying conditions, concerns over high interest rates fell to its lowest reading in 15 months. However, even after this recent decline, a majority of consumers still believe that high interest rates are weighing down homebuying conditions. The survey showed similar declines when consumers were asked about their current economic conditions and on their expectations of future business conditions.
On November 22, 2024, the University of Michigan released the final reading of the Michigan Consumer Sentiment report for November. Consumers have recognized that inflation has eased substantially over the past two years, and they generally do not expect inflation to come roaring back, Hsu said. However, they fresh forex reviews and user ratings showed concerns that the slowdown in inflation may have stalled; signs of their frustration over high prices were visible throughout the survey.
History shows that consumer confidence has been at its lowest point just prior to and in the midst of Day trading conference 2021 recessionary periods. The index rises when consumers regain confidence in the economy, which portends increased consumer spending and thus economic growth. This growth, in turn, leads to greater interest from foreign investors, which results in the increased value of the dollar against other foreign currencies. Historically speaking, the value of the dollar has usually risen whenever the Michigan CSI has come in at a higher level than was anticipated and fallen when the index came in lower.