American consumer sentiment improved in early November, with the University of Michigan’s preliminary index rising to 51.0 from 48.0 in October — but most households still say high prices are eating into their living standards.
The 6.3 percent rise left sentiment at its highest level since August, the university’s Surveys of Consumers reported on November 6, and unchanged from a year earlier. Yet the index remains 10 percent below February, and 57 percent of respondents volunteered that high prices had eroded their living standards — the highest share since May, and up from 46 percent in February.
Inflation Expectations Ease a Little
There was some relief in the details. Year-ahead inflation expectations fell to 4.3 percent from 4.7 percent in October, the lowest since August, while long-run expectations eased to 3.4 percent from 3.5 percent. The current conditions component rose to 51.0 from 46.7, and the expectations component climbed to 50.9 from 48.8.
Survey director Joanne Hsu said the improvement was modest and concentrated in personal-finance and business-condition expectations, mainly among independents. Sentiment among consumers with the largest stock portfolios fell 5 percent, and open-ended comments revealed growing anxiety over a possible AI bubble — though the survey attached no percentage to that finding.
The Reading Comes With a Big Caveat
The preliminary interviews ran from October 20 to November 2, so the survey closed the day before the midterm elections. That means this reading contains none of the election results, none of the market turbulence that followed — the S&P 500 fell 4.36 percent and the Nasdaq 5.52 percent on November 5 — and none of the October jobs report released on November 6, which showed employers adding 165,000 jobs.
The final November reading, due November 20, will be the first to include all three. Until then, the preliminary number is best read as a snapshot of how households felt before a very eventful week, not after it.
What Shoppers Should Watch
The Michigan survey measures how households say they feel, not what they spend — but feelings shape spending, and the holiday season is the year’s biggest test. The same cost-of-living squeeze shows up in our report on holiday spending splitting between richer and poorer households, while retail sales have now risen for 13 months straight, even as growth slows. If the final November reading holds the gain, it would suggest consumers are bending under high prices rather than breaking — still spending, still worried, and still watching every dollar.
