Written by Steven Hansen
The preliminary University of Michigan Consumer Sentiment for October came in at 96.0 – up from September’s 93.2, and up from August’s 89.8.
The Econoday consensus range was 90.0 to 93.7 (consensus 92.0)
Surveys of Consumers chief economist, Richard Curtin, makes the following comments:
Sentiment rebounded in early October as consumers anticipated larger income gains and lower inflation during the year ahead. As a result, real income expectations rose to their most favorable level in two decades (see the chart). Stronger finances and lower interest rates helped to modestly bolster buying plans. These favorable trends did not change consumers’ overall prospects for the national economy. A slower pace of overall economic growth is still anticipated, including some modest increases in the national unemployment rate during the year ahead. While uncertainties about trade policies have continued to depress economic prospects, its negative impact has slightly lessened (cited by 29%, down from 36%). Importantly, the impeachment inquiry has not had a significant negative impact on economic prospect; it was negatively mentioned by about half as many as negatively mentioned the GM strike (3% versus 5%). Overall, the data indicate that consumption spending will be strong enough to offset weakness in business investment spending so as to keep the economy expanding into 2020. Nonetheless, there are significant global and domestic uncertainties that will keep consumers cautious spenders, although the income gains among lower and middle income households will translate into higher spending among these households. The multiple sources of uncertainty will keep consumers focused on potential threats to their prevailing optimism about inflation, unemployment, incomes, and interest rates as well as foster continued vigilance on the level of their indebtedness.
z mich sentiment.png Source: http://www.sca.isr.umich.edu/files/chicsr.pdf
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