The presidential election did little to change overall trends in consumer views as consumer sentiment lifted for the fourth consecutive month, inching up to its highest reading since April 2024.
Unsurprisingly, the prospect of Donald Trump's economic policies has boosted the economic outlook of Republicans, while Democrats are more pessimistic about the path of the economy, said economist Joanne Hsu, director of the University of Michigan Surveys of Consumers. These patterns reflect the two groups' contrasting views on how Trump's policies will influence the economy.
On balance, consumer views remain on an upward trajectory; sentiment is now more than 40% above the June 2022 trough, though it remains well below pre-pandemic readings.
"All year, consumers have repeatedly told us that the trajectory of the economy hinges on who becomes the next president," Hsu said. "Given the tightness of the race in its final weeks, consumers were fully aware that the result could go either way.
"Thus, the election had little immediate impact on the overall path of sentiment. This likely reflects the high level of uncertainty over how the next president will implement his economic agenda. Consumers remain in a wait-and-see mode as the nation prepares for a presidential transition."
Personal finances remain stable
Consumers' views of their personal finances inched up for the third straight month. Consumers reported stronger incomes in November, and they expect further income gains in the year ahead.
While higher-income households expect particularly strong income growth in the coming year, consumers overall remain extremely frustrated by the persistence of high prices, Hsu said. About 44% of consumers mentioned that high prices are eroding their living standards, little changed from the past six months.
Prospects for economy stay on upward trajectory
More consumers anticipate a strengthening economy in the latest survey, continuing an upward trend that began in April 2024. They expect labor market conditions to remain strong; less than one-third of consumers expect unemployment to increase in the year ahead, down from 38% a year ago.
About 32% of consumers expect business conditions to improve in the year ahead, up from 27% last month and only 19% a year ago. At the same time, views of long-run business conditions, while considerably more favorable than a year ago, changed little over the past four months, Hsu said.
Consumer Sentiment Index
The Consumer Sentiment Index rose to 71.8 in the November 2024 survey, up from 70.5 in October and above last November's 61.3. The Current Index fell to 63.9, down from 64.9 in October and below last November's 68.3. The Expectations Index rose to 76.9, up from 74.1 in October and above last November's 56.8.
About the surveys
The Surveys of Consumers is a rotating panel survey at the University of Michigan Institute for Social Research. It is based on a nationally representative sample that gives each household in the coterminous U.S. an equal probability of being selected. Interviews are conducted throughout the month by web. The minimum monthly change required for significance at the 95% level in the Sentiment Index is 4.8 points; for the Current Index and Expectations Index, the minimum is 6 points.
