Friday, June 15, 2018

Consumers Are Feeling Really Good About the Here and Now, A Little Less So Going Forward, And They're Smelling Some Inflation Coming

One of the most watched consumer sentiment surveys is the one performed monthly by the University of Michigan (it's an input to our macro index). The preliminary June survey, released this morning, was interesting.

While the 99.3 headline number is very strong, and folks feel very good about current economic conditions, their future expectations are off a bit versus last month and their year ahead inflation expectations are the highest in over 3 years.

Being that the consumer accounts for 2/3rds of U.S. economic activity, it's important to keep our finger on his/her pulse:

Preliminary June Michigan Sentiment Rose to 99.3, Est. 98.5
(Bloomberg) -- The preliminary University of Michigan consumer sentiment survey for June rose to 99.3 vs. 98.0 prior month.

  • Forecast range 97.0 to 100.0 from 56 estimates
  • Current economic conditions index rose to 117.9 vs. 111.8 last month.
  • Expectations index fell to 87.4 vs. 89.1 last month.
  • Expected change in median prices during the next year rose to 2.9% vs. 2.8% last month.
  • Expected change in median prices during the next 5-10 years rose to 2.6% vs. 2.5% last month.
Below are comments from the report:
  • Year-ahead inflation expectations highest since March 2015
  • Current economic conditions second-highest reading since May 2000
  • Consumer expectations index at lowest level since Jan.

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