Consumer Sentiment

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update discusses consumer sentiment.

• Consumer sentiment rose more than expected today to a level of 64.9.  Like consumer confidence, consumer sentiment is a barometer of how consumers feel about the economy and can be a predictor of consumer spending.
• Today’s measure is a preliminary measure; a revised measure will be released later in the month.  Last month, the final measure was revised up from the preliminary measure. Today’s further increase is a good sign.
• The index has two sub-indexes: one assessing sentiment on current conditions and one assessing consumer views on the outlook.  In November’s preliminary measure, both rose, but the outlook drove the bulk of the increase.
• While the index is now at the highest level since June, it remains well below levels that are more typical.  In a statement, survey director Richard Curtin said, “Overall, it is still likely that real consumer expenditures will not be strong enough during the year ahead to enable the higher rates of economic growth needed to offset the negative grip of income and job stagnation on consumer spending.”  However, the improvement in sentiment suggests improvement in spending which may lead to further increases in the level of sentiment in the future.