Consumer sentiment improved again in November, although today’s revision to the University of Michigan Consumer Sentiment Index lowered the monthly result by 0.1 to 64.1. Despite the fractional reduction, the result still improved from the October reading of 60.9.
Consumers were slightly more upbeat in November as economic data generally came in better than anticipated, providing at least brief relief that the economy may hold its own heading into the end of the year.
While the recent uptick is encouraging, consumer sentiment remains depressed. The continued stagnation in housing and the jobs market both weigh heavily on households and sentiment remains in a range comparable to the depths of the so-called “Great Recession.”
The bottom line is that the hangover from the housing market crash, excessive household debt levels, weak job and income growth, and the lackluster expansion are evident not just on Wall Street, but on Main Street as well. As much as everyone would like to wish those problems away, it’s going to take some time for many households to recover – a fact that is not lost on the average consumer.
Given the increasing recession risks and resulting questionable outlook for 2012, we anticipate that the mood of consumers will remain restrained heading into the New Year and for some time thereafter.