vrijdag 12 mei 2017

UMich Confidence Ticks Up As Inflation Expectations Slump To Record Lows

Preliminary May data from University of Michigan shows a small uptick in overall consumer sentiment (from 97.0 to 97.7), back near cycle highs with 'expectations' rising modestly. Buying plans, however, were mixed: household durables rose to a decade peak, while vehicle buying conditions slipped to a three year low. Consumer sentiment remained on the high plateau established following Trump's election, with the early May figure nearly identical with the December to May average of 97.4...


The Trump bump was relatively small given that the Sentiment Index averaged 91.8 in the comparable six month period a year ago and 94.5 in the same period two years ago. The recent stability in consumer sentiment, however, masks two important underlying shifts in the components as well as in the partisan divide. More favorable income gains and low inflation meant that consumers held the most favorable real income expectations in a dozen years. Buying plans, however, were mixed: household durables rose to a decade peak, while vehicle buying conditions slipped to a three year low...


Home buying conditions were viewed less favorably, but were offset by the most favorable views about home selling in more than a decade. The partisan difference in the Expectations Index is still huge, but the gap between Democrats and Republicans narrowed slightly to 55 Index points from 65 three months ago, mainly due to Democrats expressing diminished fears of an immediate recession and lessened concerns about personal financial setbacks. Overall, personal consumption expenditures are expected to advance at about a 2.3% pace in 2017. However, Americans see medium-term expectations for inflation as the weakest on record....