NEW YORK – U.S. consumers have grown more cheerful so far this month as the hotly contested presidential election drew to a close and job prospects seemed to improve, according to a survey released on Friday.
As anxiety over the presidential election subsided, the University of Michigan's (search) preliminary reading of confidence for November climbed to 95.5 from 91.7 in October, according to market sources who saw the subscription-only report. Economists had forecast a more moderate rise to 93.0.
"It suggests that with the job creation that we've seen over the last few months, consumers may be a little more giving this holiday," said Gary Thayer, chief economist at A.G. Edwards and Sons (search).
The survey's measure of current conditions edged up to 106.2 from 104.0, while the expectations component rose to 88.7 from 83.8.
Confidence measures are generally viewed as a barometer of consumer spending, which accounts for two-thirds of the U.S. economy.
But the correlation between confidence and retail sales has not been strong in recent years. For that reason, financial markets had little reaction to the figures.
Data out earlier showed a sharp increase in gasoline prices has not prevented consumers from shopping in earnest. Retail sales, excluding autos, rose a respectable 0.9 percent.
Coupled with strong employment growth for October, the retail gains were seen as the latest sign that the economy is expanding at a steady clip, giving the Federal Reserve (search) room to raise interest rates further.
That is exactly what they did on Wednesday, bringing the benchmark federal funds rate to 2.00 percent from 1.75 percent in a widely anticipated move.