Investors reacted positively to a strong U.S. retail sales report on Tuesday, but there has been a historic divergence between consumer sentiment and consumer behavior.
The Numbers
On Tuesday, the Commerce Department reported U.S. retail sales grew 1.7 percent in October, ahead of analyst estimates of 1.5 percent growth. The stronger-than-expected spending numbers come the same month the consumer price index jumped 6.2 percent, its highest growth since the 1990s.Meanwhile, the University of Michigan Consumer Sentiment Index fell to 66.8 for November, its lowest level in a decade. Consumers are concerned about the negative impact inflation could have on their future spending and savings.
