NEW YORK (Reuters) - U.S. consumer sentiment rose more than expected in early November, helped by a slightly better economic outlook and early holiday sales, a survey released on Friday showed.
KEY POINTS: * The Thomson Reuters/University of Michigan’s preliminary November reading on the overall index on consumer sentiment came in at 69.3, up from 67.7 in October and slightly higher than the median forecast of 69.0 among economists polled by Reuters. * The reading is just above the 68.2 average of the last four months but below the post-recession high of 76.0 from June, according to the report. * The survey’s one-year inflation expectations measure also gained, edging up to 3.0 percent from 2.7 percent last month. * The barometer of current economic conditions rose to 79.7 from October’s reading of 76.6 and also above a forecast of 77.0.
“The University of Michigan Consumer Confidence survey showed American consumers growing more optimistic about economic conditions in the month of November. The details of the report imply a brighter outlook for current and future conditions and reflects a growing willingness by Americans to spend. Strong job growth and the rise in the stock market last month helped make everyone feel more confident about the economy and if this sentiment can be sustained, it could be a good holiday shopping season. Yet the lack of a meaningful reaction in the currency market indicates that investors remain nervous following the sharp slide in Asian equities overnight.”
“It was on the higher side of expectations which is positive, it looks like it could have formed a base in October. The rise was led by current conditions but expectations were higher too so that is positive. One-year inflation expectations were not super surprising but there were up in a pretty big rebound over the past two months which probably has to do with food and gas prices.
“It was positive, but still not very impressive.”
“Slightly better than expected, but today, there’s still the overall fear with China. It’s great to see improvement in consumers, but sentiment is still so low. Consumers are still in a saving environment and I don’t expect this to rally markets, especially if China tightens. We’re going to be looking there at least for today, though I expect it to continue being a factor.
“There’s nothing to drive us higher right now, and this is a good time for traders to lock in profits. Moving forward I expect better economic news, but I don’t think that will be enough to move markets until maybe January. Options are a great hedge for this environment. Anything can flare up at any time, so I want something that’s risk controlled since there’s still a lot of risk out there.”
“It looks like an improvement in both — current economic conditions are better; economic outlook is better. Unlike the Conference Board, which picked up a big increase in future expectations, there’s a general improvement in November. It’s not much, but it’s enough to lift the index to the highest in a while.
“I’m looking at the chart now and it’s basically, we’re at the high end of the range since July. July is when the index fell about 10 points. So probably the best way to characterize this is a modest improvement but still not enough to suggest that consumer spending is going to break out of its recent range.
“The slight improvement in sentiment suggests that spending will continue at close to its current rate through Christmas, which is better than expected even a few months ago. But it’s not going to be enough to make a material dent in the unemployment rate.”
MARKET REACTION: STOCKS: U.S. stock indexes hold losses BONDS: U.S. Treasury debt prices hold losses DOLLAR: U.S. dollar holds losses