Written by Steven Hansen
The final University of Michigan Consumer Sentiment for October came in at 95.5 – down from the preliminary of 96.0, up from September’s 93.2, and up from August’s 89.8.
The Econoday consensus range was 94.6 to 93.7 (consensus 96.6)
Surveys of Consumers chief economist, Richard Curtin, makes the following comments:
Sentiment was insignificantly below the mid month level, with the small loss spread over most components of the Index. The overall level of consumer confidence has remained quite favorable and largely unchanged during the past few years. The October level was nearly identical to the 2019 average (95.6) and only a few Index-points below the average since the start of 2017 (97.0). The focus of consumers has been on income and job growth, while largely ignoring other news. The most spontaneous references were to the negative impact of tariffs, which fell to 27% in October from last month’s 36%; the impeachment inquiry totaled just 2% in October, less than the 5% who mentioned a negative impact from the GM strike. To be sure, the multiple sources of uncertainty will keep consumers focused on potential threats to their prevailing optimism, with the most critical being threats that could significantly diminish their job and income prospects.
The mismatched trends in personal finances and buying conditions have resulted in the lackluster pace of consumer spending throughout the expansion. Earlier in the expansion, dismal growth in household incomes and jobs were matched with record favorable references to prices and interest rates on home and vehicles, while in the later part of the expansion very favorable incomes and job prospects were matched with the fewest favorable references to prices and interest rates in decades-with those lows becoming the expected norm. On the plus side, the mismatch has kept consumer indebtedness (aside from education loans) at manageable levels, and positive finances have recently buoyed spending so as to ensure the continuation of the expansion.
z mich sentiment.png Source: http://www.sca.isr.umich.edu/files/chicsr.pdf
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