Consumer sentiment rebounded in November, though Americans haven't yet forgotten the government shutdown that brought confidence down in October.[IMAGE]
The Index of Consumer Sentiment, a joint measure tracked by the ""University of Michigan"":http://umich.edu/ and ""Thomson Reuters"":http://thomsonreuters.com/, rose to 75.1 for the final November tally, making up some of the ground lost in October, when it dropped to 73.2. Last year, the index was measured at 82.7.
The release came one day after the ""Conference Board"":https://themreport.com/articles/consumer-confidence-still-shaky-in-month-after-shutdown-2013-11-26 put out its own index of November confidence, which showed continuing declines to 70.4.
According to UMich/Thomson Reuters' ""Surveys of Consumers"":http://press.sca.isr.umich.edu/ group, November's increase was due to an improved economic outlook, particularly among upper-income households ($75,000 or higher), which reported recent improvements in their finances. Those living in the bottom third of incomes ($35,000 or lower) reported ""virtually unchanged finances,"" meanwhile.
While November's improvement made up somewhat for October's shutdown-related losses, consumers still feel stung by the government's economic debate. According to Surveys of Consumers, spontaneous negative references to the government's economic policies were made by 32 percent of Americans in November, just below the all-time peak of 37 percent in October. When asked for their views of those policies, half of all consumers gave unfavorable ratings, nearly equal to the ""worst level ever recorded in the past half century.""
""Consumers expressed lingering concerns over the upcoming Congressional deadline for reaching a settlement on the federal budget and debt ceiling,"" said Richard Curtin, chief economist for Surveys of Consumers. ""While a grand bargain covering both entitlements and taxes could reduce policy uncertainty, it seems far more likely that the only agreement will be to delay a settlement until after the 2014 elections.""
Breaking down the index into its subcomponents, Surveys of Consumers recorded the Current Conditions Index at 88.0 as of the end of November, just below October's 89.9 and not far short of last November's 90.6. At the same time, the Index of Consumer Expectations strengthened, rising to 66.8 from 62.5 in October but falling short of 77.7 in November 2012.
""Consumers expect the growth rate in 2014 will be far short of the economy's potential,"" Curtin explained. ""The term that best fits the outlook of consumers is stagnation. Consumers' overall assessment of economic prospects is not bad and not good. Economic stagnation is like purgatory, it is neither heaven nor hell.""