vrijdag 31 maart 2017

UMich Confidence Measure Disappoints Amid "Rising Uncertainty Due To The Partisan Divide"

As University of Michigan's Richard Curtin writes, "Democrats expect an imminent recession, higher unemployment, lower income gains, and more rapid inflation, while Republicans anticipate a new era of robust growth in incomes, job prospects, and lower inflation. It is a rare situation that combines increasing optimism, which promotes spending, and rising uncertainty which makes consumers more cautious spenders." While MoM UMich headline data improved modestly, it declined from intra-month levels and missed expectations as both current and future expectations slipped from preliminary data... 


Expectations for higher incomes declined intra-month and timing for buying a home, car, or major appliance declined. Curtin tries to explain the divergence. "The high prevailing level of sentiment reflects the use of changed evaluative criteria. Like economists who have lowered growth prospects, consumers have done the same, and have thus judged lower rates of growth more favorably than they would have in an earlier era. Overall, the data indicate both rising optimism as well as rising uncertainty due to the partisan divide. The data indicate that real consumer spending will advance by 2.7% in 2017, but those gains will be uneven over time and across products." Meanwhile, inflation expectations slipped MoM (but gained modestly from preliminary record lows)....