US consumer sentiment rose in early November, but households still worried about the cost of living and a possible AI bubble. The University of Michigan index beat economists' forecasts, while sentiment fell among consumers with the largest stock portfolios.
The University of Michigan's Surveys of Consumers said its Consumer Sentiment Index rose to 51.0 this month from a final reading of 48.0 in October. Economists polled by Reuters had forecast the index unchanged at 48.0.
Gains concentrated among Independents
The improvement was concentrated among respondents identifying as Independents. The survey ran between October 20 and November 2.
Anger over inflation stemming from tariffs on imports and the US-Israeli war resulted in President Donald Trump's Republican Party losing control of Congress to Democrats in Tuesday's midterm elections, according to Reuters.
Sentiment falls 5% among largest stock portfolios
Sentiment lifted for lower- and middle-wealth consumers, but it fell 5% for those with the largest stock portfolios after a relatively turbulent period in stock markets. According to Survey of Consumers director Joanne Hsu: "consumers’ comments revealed growing anxiety over a possible AI bubble."
Price expectations eased as well. The survey's measure of consumer expectations for inflation over the next year fell to 4.3% from 4.7% last month. Expectations over the next five years dipped to 3.4% from 3.5% in October.
Source: Reuters via Investing.com
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