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The University of Michigan Consumer Sentiment Index slumped from an October reading of 100.7 to a November reading of 98.5, a 2.2% month-over-month decrease.  Economists polled by Bloomberg were expecting a November reading of 98.1.

The month-over-month consumer expectations sub-index fell from from 90.5 to 88.9 (down 1.8%) and the current conditions sub-index slipped from 116.5 to 113.5 (down 2.6%).

Year-over-year, the consumer sentiment index is up 5%, the current conditions sub-index is up 5.8%, and the consumer expectations sub-index is up 4.3%.

The survey’s chief economist, Richard Curtin, said:

Consumer sentiment narrowed its loss from mid-month, although it was still slightly below last month’s decade peak. Overall, the Sentiment Index has remained largely unchanged since the start of the year at the highest levels since 2004. What has changed recently is the degree of certainty with which consumers hold their economic expectations. In contrast to the media buzz about approaching cyclical peaks and an aging expansion, with the implication of greater uncertainty about future economic trends, consumers have voiced greater certainty about their expectations for income, employment, and inflation. Inflation expectations have shown the smallest dispersion on record, and increased certainty about future income and job prospects has become a key factor that has supported discretionary purchases. To be sure, caution is warranted given that the current expansion will soon be the second longest expansion since the mid-1800s, as well as the potential for significant changes in tax policies and the new Fed leadership and Board members. Interestingly, the data indicate that neither changes in fiscal nor monetary policies have yet had any noticeable impact on consumer expectations. Overall, the data signal an expected gain of 2.7% in real consumption expenditures in 2018, and more importantly for retailers, the best runup to the holiday shopping season in a decade.