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UMich Sentiment Disappoints As Democrats Outlook Hits Lows

Courtesy of ZeroHedge View original post here.

After the flash October sentiment survey extended September's rebound from August's slump, expectations were for the small positive to hold or improve further, but the final print was slightly disappointing – dropping from 96.0 to 95.5 (still up from 93.2 in September).

  • Expectations index rose to 84.2 vs. 83.4 last month.

  • Current economic conditions index rose to 113.2 vs. 108.5 last month.

Source: Bloomberg

As UMich notes, 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.

Buying conditions for vehicles and large appliances bounced notably, not so much that of housing…

Source: Bloomberg

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.

The middle- and lowest-income cohorts saw sentiment improve the most…

Source: Bloomberg

And finally, the divide between Democrats and Republicans remains wide with those on the left the most unhappy since Trump was elected

Source: Bloomberg

Finally, we note that longer-term, UMich is signaling an inflection point in the labor market…

Source: Bloomberg

 

 


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