Consumer Sentiment Up 7.6% in November

Ann Arbor, MI, November 23, 2016—Consumer sentiment rose 7.6% in November to 93.8 from October’s 87.2 rate, according to the final results from the University of Michigan’s Survey of Consumers.

This represents a 2.7% increase year over year.

“The initial reaction of consumers to Trump's victory was to express greater optimism about their personal finances as well as improved prospects for the national economy,” said Survey of Consumers chief economist, Richard Curtin. “The post-election gain in the Sentiment Index was +8.2 points above the November pre-election reading, pushing the Index +6.6 points higher for the entire month above the October reading. The post-election boost in optimism was widespread, with gains recorded among all income and age subgroups and across all regions of the country. The upsurge in favorable economic prospects is not surprising given Trump’s populist policy views, and it was perhaps exaggerated by what most considered a surprising victory as well as by a widespread sense of relief that the election had finally ended. To be sure, no surge in economic expectations can long be sustained without actual improvements in economic conditions. Presidential honeymoons represent a period in which the promise of gains holds sway over actual economic conditions. Presidential honeymoons, however, can quickly end if they are unaccompanied by prospects that economic conditions will actually improve in the future. President-elect Trump appears to appreciate the importance of his first hundred days; the key issue is whether his economic policies will resonate with the nation's consumers. The data indicate that consumer spending will advance by 2.5% in 2017.”