U.S. consumers grew more confident in the economy in late
November and early December, with many expecting the economic conditions to
improve when the country begins to exit from the coronavirus pandemic.
The University of Michigan said Friday its index of consumer
sentiment climbed to 81.4 in the two weeks ended Dec. 9, from 76.9 in November.
Economists surveyed by The Wall Street Journal expected a reading of 75.5.
Rosier expectations for the economy drove the index’s
rebound, though respondents’ views on current economic conditions improved as
well.
“Most of the early December gain was due to a more favorable
long-term outlook for the economy, while year-ahead prospects for the economy
as well as personal finances remained unchanged,” said Richard Curtin, the
survey’s chief economist.
A partisan skew in views was responsible for much of the
upward shift in sentiment, Mr. Curtin said, with Democrats becoming more
optimistic about the economy and Republicans more pessimistic, following
President-elect Joe Biden’s victory in the presidential election.
Attitudes on the economy have long been fueled more by party
affiliation than by actual performance, with respondents taking a more
favorable outlook when their party has the White House, according to polling
data.
The buoyant stock market and promising news on coronavirus
vaccines may also explain the gains in the expectations subindex, said Ian
Shepherdson, chief economist at Pantheon Macroeconomics.
A separate weekly index of consumer sentiment by Morning
Consult, a data intelligence firm, edged down to 86.8 in the week ended Dec. 8,
compared with 90.6 in early November.
The University of Michigan’s release comes amid signs the
economic recovery slowed in November and early December as coronavirus cases
surged and some states placed new restrictions on activity.
The number of workers filing for unemployment benefits, a
proxy for layoffs, rose to 853,000 last week, the Labor Department reported
Thursday. Employers added 245,000 jobs in November, from 610,000 in October,
according to the Labor Department. Private-sector data indicated the number of
job openings notched down in early December. Consumers upped their spending by
0.5% in October, down from the 1.2% increase a month earlier.
Increased spread of the virus could damp consumer activity
in coming weeks as governments restrict businesses and encourage people to stay
home, and shoppers cut spending on services provided in-person, in proximity to
other people, such as air travel and indoor dining.
The U.S. seven-day moving average of new Covid-19 cases hit
210,000 on Thursday, an increase of 72% from a month earlier, according to a
Wall Street Journal analysis of Johns Hopkins data. The U.S. reported more than
3,100 deaths from Covid-19 for Wednesday, exceeding the previous record of more
than 2,800 set on Dec. 3 and pushing the seven-day moving average of deaths
higher than the previous peak reached in April, according to data compiled by
Johns Hopkins University.
Write to Gwynn Guilford at gwynn.guilford@wsj.com.
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