Analysis:
- Consumer sentiment rose in November to 96.8, an increase of 1.3 points from above the October reading of 95.5.
- The expected index, an indicator how consumers’ future sentiment expectations, also rose to 87.3 from 84.2.
Economist Corner:
As the consumer goes, so goes the economy. That is true at least in the United States. Consumption tends to account for the lion’s share of U.S. economic activity (around two-thirds). Whether economic growth can continue to roar, therefore, depends in no small part on the strength of consumption growth.
This latest data from the University of Michigan indicates that consumption is still in a position to support an expansion of economic output. Consumer sentiment increased between October and November. An index of consumer expectations also ticked up. This suggests that consumers are still positioned to spend, buoying the economy.
Given the role of consumers in driving overall economic growth, based on this latest data, businesses and governments have cause to join them in revising their expectations upward.