Consumer confidence improves in November

Consumer confidence improves in November
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Consumer confidence was buoyed in November by an improving outlook among middle- and lower-income households.

Sentiment improved to 91.3 this month, which was less than forecast, up from 90 in October, according to the University of Michigan survey of consumer confidence released on Wednesday. 

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Those middle- and lower-income households, which represent the lower two-thirds of the income scale, said they are feeling more confident that their paychecks will increase.

But those making higher incomes expressed concerns on that front, most likely stemming from turbulence rippling across financial markets over the past few months. 

“The more guarded outlook of high-income consumers reflects a slightly weaker outlook for their own personal finances,” said Richard Curtin, chief economist for the survey.

Only 29 percent of consumers with incomes in the top third expected their finances to improve during the year ahead compared with 38 percent of middle- and lower-income households.

“It is not surprising that the cross-current displayed by the domestic and global economies have and will continue to cause adjustments by consumers," Curtin said. 

"These adjustments are needed for consumers to maintain their resilience, which has been crucial to steady the pace of economic growth."

Steady hiring is boosting confidence even amid global financial turmoil and the recent terrorist attacks in Paris.

The largest improvement in the survey came in the current conditions index, which rose to 104.3 from 102.3 in October.

Expectations for the future rose slightly to 82.9 from 82.1 in October and have recovered from this year’s low of 78.2 in September when the U.S. and global economies hit a rough patch. 

Consumers have remained cautious with their spending in the long aftermath of the 2008 financial crisis. 

Overall, the data show that spending will increase 2.8 percent in 2016, the survey said.

The report noted that the insistence from consumers for low prices has rarely been greater in the more than half-century history of the surveys.

For vehicles, consumers experienced a welcome combination of price discounts and low interest rates.

“Middle- and lower-income households expect somewhat larger income gains than they enjoyed in the past, but their insistence on discounts is no less than before,” Curtin added.