US consumer sentiment saw an improvement for the fourth consecutive month in November, as reported by the University of Michigan's Consumer Sentiment Index. The index rose to 71.8, the highest level since April, compared to 70.5 in October.
However, this was lower than both the preliminary reading of 73.0 and the economists' forecast of 73.7. The initial reading was collected prior to the November 5 presidential election, suggesting post-election dynamics influenced sentiment shifts as reported by MIDF Amanah Investment Bank Bhd (MIDF Research).
Republican optimism following Donald Trump's presidential victory significantly boosted the Expectations Index to 76.9 from October's 74.1, marking its highest level in eight months. In contrast, the Current Economic Conditions Index fell to 63.9 from 64.9, reflecting a more cautious view of present economic conditions.
On inflation, short-term expectations eased slightly, with 1-year inflation projections falling to 2.6% from October's 2.7%. However, long-term inflation expectations climbed to 3.2% from 3.0%, the highest level this year, signalling increased concerns over future inflationary pressures.
Meanwhile, the services sector demonstrated strong growth, as reflected in the Flash S&P Global PMI, which surged to 57.0 in November from 55.0 in October—a 32-month high. This growth was attributed to expectations of lower interest rates and positive economic policies. However, the manufacturing sector remained weak, with its PMI rising marginally to 48.8 from 48.5, staying below the neutral 50 mark, indicating a continued contraction.
MIDF Research notes that while the US economy shows signs of resilience, particularly in consumer sentiment and the services sector, caution is warranted due to elevated inflation risks and persistent weakness in manufacturing. These factors could influence Malaysia's economic prospects, especially in terms of trade and monetary policy adjustments.
