The University of Michigan noted: “Consumer confidence is little changed this month, rising 1.3 index points from October. In November, sentiment extended a four-month period of consecutive incremental increases.”
Current economic conditions fell from 64.9 in October to 63.9 in November, while the Consumer Expectations Index rose from 74.1 to 76.9. According to the report, the expectations index rose for Republicans and fell for Democrats in response to the presidential election results.
Inflation expectations for the coming year fell from 2.7% in October to 2.6% in November. Year-ahead inflation expectations are at their lowest level since December 2020. In the two years leading up to the pandemic, year-ahead inflation expectations ranged between 2.3% and 3.0%.
Long-term inflation expectations rose from 3.0% in October to 3.2% in November. The report shows that uncertainty about long-term inflation has also increased. The rise in long-term inflation expectations reflects recent movements in government bond markets. The yield on 10-year government bonds rose from 3.70% at the beginning of October to 4.42%, while the yield on 30-year government bonds rose from 4.05% to 4.60%.
The US Dollar Index pulled off session highs as traders reacted to the Michigan Consumer Sentiment report. Currently, the US Dollar Index is trying to settle below the 107.50 level.
Gold tested the $2,700 level as traders remained focused on geopolitical tensions.