U.S. Consumer Sentiment Rises to Seven-Month High

(Reuters) – U.S. consumer sentiment rose to a seven-month high in early November, as households' expectations for the future reached the highest level in over three years, according to a survey released on Friday.

The University of Michigan's Consumer Sentiment Index increased to 73.0 this month, the highest since April, up from 70.5 in October. This result surpassed the median estimate among economists polled by Reuters, which anticipated a reading of 71.0.

The survey's expectations index rose nearly 6% to 78.5, the highest since July 2021.

> "Expectations over personal finances climbed 6% in part due to strengthening income prospects, and short-run business conditions soared 9% in November," said survey Director Joanne Hsu in a statement. "Long-run business conditions increased to its most favorable reading in nearly four years."

As has been typical for several years, the report showed a significant partisan skew, reflecting sentiments from a survey completed before Tuesday's presidential election, where Republican Donald Trump emerged victorious over Democrat Kamala Harris.

Year-ahead inflation expectations for November dropped to 2.6%, down from 2.7% in October, marking the lowest level since December 2020. Long-term inflation expectations edged up to 3.1% from 3.0% in October.

The Federal Reserve implemented a rate cut for the first time in four years in September by half a percentage point, followed by a second cut of a quarter percentage point on Thursday, two days after the election. Fed Chair Jerome Powell indicated a cautious approach to further cuts.