Consumers are unshaken by the impeachment drama unfurling in Washington, D.C.
The University of Michigan’s consumer sentiment index edged higher in early November, rising to 97.5 from October’s reading of 95. Economists had expected a smaller rise.
The survey’s gauge of current conditions declined a bit. This was more than offset by an improvement in expectations.
“References to the impact of impeachment on economic prospects were virtually non-existent, mentioned by less than 2% in October and November,” said Richard Curtin, the survey’s chief economist.
Consumer sentiment is looked to for clues about consumer spending, which accounts for somewhere around 70 percent of economic activity. It is particularly important now because business investment has slumped. Consumer sentiment may also be politically important as we approach the 2020 presidential contest.
“Although consumers have become somewhat more cautious spenders, they see no reason to engage in the type of retrenchment that causes recessions,” said Curtin.