US Consumer Sentiment Rises to Six-Month High on Rate Relief
Source: Bloomberg
Economics
US Consumer Sentiment Rises to Six-Month High on Rate Relief
University of Michigan final October index at 70.5 vs 70.1
Gain tied to better buying conditions, financing costs
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The university's measure of buying conditions for durable goods picked up to a four-month high.Photographer: Spencer Platt/Getty Images
By Vince Golle
October 25, 2024 at 10:00 AM EDT
Updated on October 25, 2024 at 10:11 AM EDT
Sentiment among US consumers increased in October to a six-month high as households grew more upbeat about buying conditions, partly because of cheaper financing costs.
The final October sentiment index rose to 70.5 from 70.1 a month earlier, according to the University of Michigan. The preliminary reading was 68.9.
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Read more: https://www.bloomberg.com/news/articles/2024-10-25/us-consumer-sentiment-rises-to-six-month-high-on-rate-relief
Surveys of Consumers, University of Michigan
Final Results for October 2024
http://www.sca.isr.umich.edu/
Read our October 25th report, Current versus Pre-Pandemic Long-Run Inflation Expectations
https://data.sca.isr.umich.edu/fetchdoc.php?docid=77164
Next data release: Friday, November 08, 2024 for Preliminary November data at 10am ET
Surveys of Consumers Director Joanne Hsu
Consumer sentiment lifted for the third consecutive month, inching up to its highest reading since April 2024. Sentiment is now more than 40% above the June 2022 trough. This month’s increase was primarily due to modest improvements in buying conditions for durables, in part due to easing interest rates. The upcoming election looms large over consumer expectations. Overall, the share of consumers expecting a Harris presidency fell from 63% last month to 57% in October. Sentiment of Republicans, who believe that a Trump presidency would be better for the economy, rose 8% on growing confidence that their preferred candidate would be the next president. In contrast, sentiment declined 1% for Democrats. As usual, Independents remain in between, with a 4% gain in sentiment this month. Regardless of the eventual winner, a sizable share of consumers will likely update their economic expectations based on the results of the election.
Year-ahead inflation expectations were unchanged from last month at 2.7%. The current reading falls within the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations edged down from 3.1% last month to 3.0% this month, remaining modestly elevated relative to the range of readings seen in the two years pre-pandemic.
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