Written by Steven Hansen
The preliminary University of Michigan Consumer Sentiment for November came in at 95.7 – up from October’s 95.5, and up from September’s 93.2.
The Econoday consensus range was 94.5 to 97.5 (consensus 96.0)
Surveys of Consumers chief economist, Richard Curtin, makes the following comments:
The early November reading on consumer sentiment was nearly identical to last month’s and the average 2019 level (95.6). Consumers did voice a slightly more positive outlook for the economy, which was offset by a slightly less favorable outlook for their own personal finances. Spontaneous negative references to tariffs were still mentioned by one-in-four consumers in early November. References to the impact of impeachment on economic prospects were virtually non-existent, mentioned by less than 2% in October and November. The lack of impact on economic prospects is broadly similar to Clinton’s but not Nixon’s impeachment inquiry. The critical difference was that during Clinton’s impeachment, economic conditions remained very favorable; indeed consumer sentiment was at its most favorable levels ever recorded. In contrast, Nixon’s impeachment inquiry started at the same time as the oil embargo in October 1973, with oil prices quadrupling over the next six months. While consumers voiced a rapid collapse in optimism, many believed Nixon was too distracted to attend to their concerns about escalating inflation and unemployment, or that the economy would fall into recession in late 1973. The current performance of the economy, in contrast, is neither as bleak as Nixon’s nor as good as Clinton’s. The strongest aspect of the current economy has been job and wage gains. Although consumers have become somewhat more cautious spenders, they see no reason to engage in the type of retrenchment that causes recessions. While most consumers do not anticipate year-to-year increases in the unemployment rate, the majority of consumers expect the unemployment rate to remain largely unchanged at its lowest level in 50 years (see the chart).
z mich sentiment.png Source: http://www.sca.isr.umich.edu/files/chicsr.pdf
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