Consumer confidence rose more than previously reported to a six-month high in November, showing Americans became more optimistic about their finances and the economy after Donald Trump won the presidential election.
The University of Michigan final index of sentiment, released Nov. 23, rose to 93.8 from 87.2 in October, after a preliminary reading of 91.6 that reflected pre-election views. The split between respondents was stark in the survey before and after the Nov. 8 vote, with sentiment rising 8.2 points in the post-election group from the pre-election cohort.
The increase suggests that Americans were heartened on the whole by Trump’s victory over Democrat Hillary Clinton, with broad gains in confidence across incomes, ages and regions, according to the report. At the same time, the change may reflect a “honeymoon” period that could fade unless actual economic conditions improve, said Richard Curtin, director of the Michigan survey.
“President-elect Trump appears to appreciate the importance of his first 100 days; the key issue is whether his economic policies will resonate with the nation’s consumers,” Curtin said in a statement. “The honeymoon may be shorter than usual, given the intensity of the opposition, although President-elect Trump has proven himself to be a skilled communicator.”
The November preliminary index reflected about 390 responses on or before the presidential election, while the final gauge included an additional 220 interviews after the event.
Estimates in the Bloomberg survey of economists for the Michigan index ranged from 88.3 to 95. The Nov. 23 figure compares with the average of 91 in the first 10 months of this year.
The median projection in a Bloomberg survey called for 91.6, the same as the preliminary reading earlier this month.
The current conditions index, which measures Americans’ perceptions of their personal finances, rose to a four-month high of 107.3 in November from a one-year low of 103.2 in October.
The gauge of expectations six months from now gained 8.4 points to 85.2, the biggest jump in four years, from a two-year low of 76.8 in October.
Respondents expected the inflation rate in the next year will be 2.4%, compared with 2.7% in the November preliminary survey and 2.4% in the October survey. Over the next five to 10 years, they project a 2.6% rate of price growth, after 2.4% in the prior month.