NEW YORK Nov 21 U.S. consumer sentiment
weakened in November as the holiday shopping period was getting
underway amid growing uncertainty over federal tax and spending
programs next year, a survey released on Wednesday showed.
The Thomson Reuters/University of Michigan's final reading
on consumer sentiment came in at 82.7, a touch up from 82.6 in
October but down from a preliminary reading of 84.9 released
earlier this month.
It was also below the median forecast of 84.5 among
economists polled by Reuters.
The softening in sentiment comes as the holiday shopping
season kicks off with the so-called Black Friday shopping day
after this week's Thanksgiving holiday. The period is critical
for retailers, who often see their books turn from loss to
profit at the end of the year.
"This holiday season might be softer than last year," said
Conrad Dequadros, senior economist at RDQ Economics in New York,
citing the late October storm that crippled the Northeast and
the ongoing impasse in Washington over budget talks.
But Dequadros added: "Even with the pullback, we are sitting
near the high of the recovery."
The main culprit behind the index's softening came in how
consumers see the future. The survey's gauge of consumer
expectations slipped to 77.6 from 79.0 in October and was lower
than the forecast of 80.1.
"The late-month retreat was accompanied by more economic
uncertainty about future federal taxes and spending programs and
the inability of the political parties to reach a settlement,"
survey director Richard Curtin said in a statement.
The survey's barometer of current economic conditions faired
better. The gauge, which measures how consumers view their
present situation, rose to 90.7 from an October final reading of
88.1 and just above a forecast of 90.6.
U.S. retail sales should rise 4.1 percent this holiday
season, slower growth than in the past two years as mixed
economic data and political uncertainty weigh on consumers, the
National Retail Federation said in October.
Peter Boockvar, a portfolio manager at Miller Tabak, said
the confidence numbers in themselves are not a reliable
indication of how holiday sales will shape up.
"In terms of holiday spending, confidence is a coincident
indicator and thus won't tell us much about how much spending
we'll see relative to the same time last year," he said in an
The Thomson Reuters/University of Michigan survey's one-year
inflation expectations were steady at 3.1 percent, while the
survey's five-to-10-year inflation outlook was at 2.8 percent
from 2.7 percent.