U.S. consumer sentiment improved for a third straight month in November as Americans grew more upbeat about their financial situation and the economic outlook, fresh signs they’ll continue to fuel growth.
The University of Michigan’s preliminary sentiment index edged up to 95.7 from 95.5 in October, according to data released Friday that topped projections for no change. The expectations gauge rose to a four-month high while the reading for current conditions decreased. Economic outlooks for the next 12 months and five years both rose.
The longest streak of sentiment gains in two years is the latest sign that low unemployment, record stock prices and Federal Reserve interest-rate cuts are brightening the outlook for consumers whose spending has underpinned growth.
An improved financial situation was reported by 55% of all consumers in early November, a level that’s only been exceeded in four other surveys in a half-century of data.
Consumers were more likely to anticipate good times in the overall economy rather than bad in the year ahead, and were more likely to expect a continuous economic expansion, both marking shifts from last month, according to the report.
The interview period from Oct. 22 to Nov. 6 included last week’s packed calendar for economic news, and the Fed’s third-straight interest-rate cut. The reports showed steady economic growth and hiring, while Washington and Beijing moved closer toward a trade agreement.
Cooling trade tensions with China also may spur further increases in sentiment, which fell in August to the lowest level of Donald Trump’s presidency as Americans expressed concern about how his tariffs would affect the economy.
The Michigan data follow mixed readings in other measures of sentiment. Bloomberg’s Consumer Comfort Index fell in the week ended Nov. 3 to the lowest since March, while the Conference Board’s gauge remained near historically high levels in October.
Consumer expectations for inflation in the year ahead were unchanged at 2.5%, with five-year estimates rising to 2.4% from 2.3% in October. Fed policy makers have been concerned that inflation is persistently below their target.
A measure of buying conditions for household durable goods slipped to 153 from 160, about in line with this year’s average.
Economists surveyed by Bloomberg estimated that the November sentiment gauge would hold at 95.5.