After showing U.S. consumer sentiment at its lowest level in over a year in the previous month, the University of Michigan released a report on Friday showing that consumer sentiment rebounded to a six-month high in November.
The preliminary report showed that the consumer sentiment index jumped to 91.6 in November after slumping to 87.2 in October. Economists had expected the index to inch up to 87.5.
With the bigger than expected increase, the consumer sentiment index reached its highest level since climbing to 94.7 in May.
The rebound by the headline index reflected a substantial improvement in the outlook for the economy, as the index of consumer expectations surged up to 82.5 in November from 76.8 in October.
The report also showed an improvement in the assessment of current conditions, with the current economic conditions index rising to 105.9 in November from 103.2 in the previous month.
However, Richard Curtin, the survey's chief economist, said the most striking finding in early November was a jump in both near and long-term inflation expectations.
On the inflation front, the report said one-year inflation and five-year inflations expectations both spiked to 2.7 percent in November from 2.4 percent in October.
"These increases must be replicated before they can be taken to indicate a troublesome development," Curtin said. "Nonetheless, it may be viewed as added justification for next month's expected interest rate hike."
Curtin noted the data must be accompanied by the proviso that it was collected before the result of the Presidential election was known.
by RTT Staff Writer
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