The preliminary reading of consumer sentiment in November from the University of Michigan rose 7.7% to 79.9, the highest level in three months. Consensus expectations had been for less of an improvement to 76.8.

During the last ten years there has been a 78% correlation between the level of consumer sentiment and the y/y change in real consumer spending.

The mean expected inflation rate for the next twelve months fell sharply to 4.6 from 5.5% expected in October. That prompted Consumer expectations to rise 5.7% and expected business conditions during the next year to surge 14.7%.

The current conditions index also improved 10.0% m/m (-4.2% y/y) due to 10% gains in personal finances and in buying conditions for large household goods.

The University of Michigan survey is not seasonally adjusted.The mid-month survey is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.