August final University of Michigan consumer sentiment data
- Lowest since Oct 2016
- Preliminary reading was 92.1 compared to 97.0 expected
- Prior reading was 98.4
- Current conditions 105.3 vs 107.4 prelim (prior was 110.7)
- Expectations 79.9 vs 82.3 prelim (prior was 90.5)
- 1 year inflation 2.7% vs 2.7% prelim
- 5-10 year inflation 2.6% vs 2.6% prelim
Terrible numbers. When the preliminary data came out they were shockingly bad and this is even worse. it's the largest monthly decline since Dec 2012 which was on the 'fiscal cliff' fiasco. The survey notes that one-in-three consumers mentioned tariffs.
This is a real conundrum because the consumer confidence data from the Conference Board were good and these are horrible. The rule of thumb is that this survey is more-sensitive to stock markets while the Conference Board survey is more sensitive to jobs.
Here is a look at the 'expectations' component:
From survey chief economist Richard Curtin:
Trump's tariff policies have been subject to repeated reversals amid threats of higher future tariffs. Such tactics may have some merit in negotiations with China, but they act to increase uncertainty and diminish consumer spending at home. Unlike the repeated tariff reversals, negative trends in consumer sentiment cannot be easily reversed.
