The University of Michigan index of consumer sentiment fell to 91.3 in the final November print, down from 93.1 in the mid-month preliminary estimate. We and the consensus had looked for a nearly unchanged index reading. The downward revision was driven primarily by consumer expectations, which fell to 82.9 (initial: 85.6, previous: 82.1). The current conditions index was revised down more modestly to 104.3 (initial: 104.8, previous: 102.3).
Data released with the survey results states that the late-month decline in sentiment was in fact not due to the recent terrorist attacks, as respondents thought those events would have little impact on the US economy. Furthermore, most major survey components continue to show improvement from the final October levels.
The year-ahead (106, previous: 101) and longer-term (105, previous: 101) economic outlook improved this month. Current personal finances were unchanged (111) and expected personal finances declined from an elevated October print (122, previous: 127).
Year-ahead price expectations rose two-tenths in the final estimate to 2.7%, and long-term inflation expectations ticked up one-tenth to 2.6%. Measures of purchasing sentiment were broadly steady from the mid-month reading and continue to show improvement over October.
"The final November survey results show sentiment remains broadly stable near its cyclical highs. This reading contrasts with the decline yesterday in the Conference Board's index. The two indices can vary a bit from month-to-month, but this morning's results suggest sentiment has not entered a downward trajectory", notes Barclays.
