Survey: US consumer sentiment ticks up as middle-class Americans expect income gains

WASHINGTON – Americans were more optimistic
about their incomes and personal finances this month,
particularly among lower and middle-class households,
lifting consumers' outlook.
The University of Michigan's consumer sentiment
index, released Wednesday, rose to 91.3 in November
from 90 in the previous month. That is close to the
average for the past six months of 91.6.
Steady hiring and rising wages and salaries are slowly
lifting Americans' confidence in the economy, though it
remains muted by historical standards. The modest
increase suggests consumers could spend more over
the coming holiday shopping period.
Among lower and middle-income households, 38
percent expect their personal finances to improve in the
coming year, compared with just 29 percent of higher-
income households. The outlook for wealthier families
appears to have been tempered by recent swings in the
stock market.
The report included some cautionary signs for retailers
as the winter holiday shopping season gets under way.
Consumers at all income levels appear intensely
focused on discounts and bargains.
"The insistence of consumers on discounts in prices
has rarely been greater in the more than half-century
history of the surveys," Richard Curtin, chief economist
of the survey, said. The data "indicate the indelible
impact that the Great Recession has had in making
consumers more cautious spenders."
The University of Michigan survey conflicts with data
from the Conference Board, released Tuesday, that
showed a sharp drop in confidence in November. The
Conference Board's consumer confidence index
dropped to 90.4, from 99.1, its lowest level since
September 2014.
"Consumer sentiment and confidence indices have been
erratic in recent months, but they remain at
comparatively healthy levels," Joshua Shapiro, chief
economist at MFR Inc., said in a note to clients.
Still, job growth has been healthy and there are signs
wages have begun to pick up. Employers added 271,000
jobs in October, the most this year, and the
unemployment rate fell to 5 percent from 5.1 percent.
Consumer spending has increased at a healthy pace of
3 percent or above in the past two quarters, though it
slowed in October, according to government data
released Wednesday.
Yet that also pushed up the savings rate to a healthy
5.6 percent last month. That suggests consumers are in
better shape to boost spending over the holidays.