The impending fiscal cliff, which is expected to have widespread repercussions on government spending and federal tax rates, has caused consumer sentiment in the United States to stall in November.
According to the monthly survey of 500 households conducted by Thomson Reuters and the University of Michigan, the consumer sentiment index stood at 82.7, on a scale of one to 100. The gauge, which missed analysts’ median forecast of 84.5, increased only a tenth of a point from October’s reading of 82.6.
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“The late-month retreat was accompanied by more economic uncertainty about future federal taxes and spending programs and the inability of the political parties to reach a settlement,” survey director Richard Curtin said in a statement.
The survey also takes into account more varied factors than just current sentiment. Looking to the future, the index of consumer expectations, which projects consumer spending six months ahead, dropped from 79.0 in October to 77.6, indicating that Americans are increasingly concerned about the future. However, the survey’s barometer of current economic conditions improved over the month. The index of current conditions, which reveals Americans’ perceptions of their financial position, rose from 88.1 in October to 90.7.
Bloomberg’s weekly Consumer Comfort Index gave a similar reading of consumers’ current expectations. Based on a different scale, the results showed that confidence fell to -33.9 from -33.1 last week. Yet, the publication also noted that 37 percent of its survey’s respondents said the economy is improving, an increase of 7 points from last month and 30 points from a year ago.