UMich Sentiment Slides As Hope Fades, Buying-Plans Plunge

After sliding across the board in October, November’s flash University of Michigan Sentiment was expected to extend that decline and it did , dropping from 98.6 to 98.3 (though better than the expected 98.0). Expectations slipped lower as ‘current conditions’ flatlined.

Even with the second straight decline, sentiment remains close to the highest since 2004, and the UMich Sentiment Index remained higher thus far in 2018 than in any prior year since 2000…

But buying expectations slipped lower across Homes, Autos (lowest since Nov 2013), and major appliances…

Income expectations have improved (reversing October’s plunge) and consumers anticipate continued robust growth in employment, but consumers also anticipate rising inflation and higher interest rates.

Among the working age population, those between the ages of 25 and 54, the anticipated annual gain in nominal household income was 3.6% in November, the best in the past decade

While these positive and negative changes act to offset each other in the aggregate, younger consumers have benefited most from more positive income trends and older consumers are more likely to complain about the erosion of their living standards due to rising prices.