Consumer Sentiment is Improving, But Fell Short Of Post-Election Bump Expectations | Global News Avenue

The first major consumer confidence index since the presidential election showed that people’s feelings about the economy have improved, but the increase was not as large as economists expected.

this Michigan Consumer Confidence Index November finally closed at 71.8, an improvement from October but still lower than November preview 73.0, the consumer survey concluded before Republican Donald Trump was elected president. The final reading was also lower than the 73.5 forecast by economists polled wall street journal and Dow Jones Newswires.

Joanne Hsu, director of the Michigan Consumer Survey, said final results showed some consumers’ mood dropped after the election results.

“Republicans’ expectations index surged and Democrats’ expectations index fell this month, reflecting the two groups’ disagreement about how Trump’s policies will affect the economy,” Hsu wrote.

Market sentiment improves for fourth consecutive month

Overall, consumer confidence has gradually improved over the past four months Until the November 5 election. Voter sentiment tends to dip during presidential campaigns Uncertainty about the path of the economybut consumers tend to feel better about the state of the economy once the election results are in. The survey showed that while views on current economic conditions fell in November, their expectations for future economic growth rose.

Chief investment officer Jim Baird said: “Overall, consumers expect the economy to improve modestly over the next six months, but there is a more subtle shift in sentiment that tends to correlate with political affiliation and individual respondents. about the election results,” with Plante Moran Financial Advisors.

Inflation expectations adjust ahead of Trump tariff proposals

The survey also showed a change in people’s views on inflation, with many economists believing inflationary sentiment would move higher if Trump enacted the bill. tariffs he proposed during the campaign. fed official Keep a close eye on consumer inflation expectations Because they can help influence price movements.

Inflation expectations for the next year fell to 2.6%, a slight decrease from last month, but five-year inflation expectations rose to 3.2%, indicating increased uncertainty in long-term prices.

“While consumers recognize that inflation has eased significantly, there is less certainty about the Fed’s ability to keep inflation near its 2% target over the long term,” Baird said.