University of Michigan Consumer Sentiment signaled a small downtick in July – despite soaring stock markets – but the confidence boost was very mixed across wealth cohorts.
While the highest income Americans became more confident in July, middle-income Americans’ confidence tumbled to 5-month lows…
However, as UMich points out, economic confidence has been remarkably stable since the start of 2017, despite ongoing trade uncertainties. The resilience displayed has been primarily due to a renewed sense of personal financial optimism. Indeed, recent surveys have recorded the most favorable net personal financial expectations since May 2003.
Positive job and income prospects, gains in net household wealth, and low inflation have bolstered optimism. At present, consumers do not anticipate a rapid acceleration in income growth rates, nor do they expect significant changes in inflation and unemployment rates. Consumers have not ignored mounting policy uncertainties as they have begun to take precautionary measures to increase savings and reduce debt. Favorable buying attitudes toward homes and vehicles have significantly receded from their cyclical peaks despite declining interest rates.
Finally, as UMich notes, a key issue is whether the recently announced tariffs on Chinese imports, covering more commonly purchased consumer items, will spark an even more cautious outlook.
via ZeroHedge News https://ift.tt/31fmLnt Tyler Durden