Consumer sentiment rose sharply in early November, according to the preliminary University of Michigan index, which climbed to 51.0 from a final October reading of 48.0. Economists polled by Reuters had expected the index to hold at 48.0.
Inflation expectations also eased. Consumers’ 12-month inflation expectation fell to 4.3 percent from 4.7 percent, while the five-year expectation slipped to 3.4 percent from 3.5 percent.
Gains uneven across households
The improvement was not evenly spread. Sentiment rose among low- and middle-wealth consumers, but fell 5 percent among respondents holding the largest stock portfolios, Joanne Hsu, director of University of Michigan Surveys of Consumers, said. The decline came after a turbulent stretch for equities.
Gains came mainly from self-identified independents. The survey ran from 20 October to 2 November, ahead of the midterm elections.
Concern about an AI bubble
Hsu said consumer comments revealed rising concern about a possible AI bubble. Worries about the high cost of living also persisted.
Respondents cited tariffs on imports and inflation linked to the US-Israel war. Those factors were among the issues Republicans faced when they lost control of Congress to Democrats in the midterms.
Source: University of Michigan
