UMich Sentiment Slumps To Second-Lowest Since 2011, Inflation Expectations Spike

Following September’s modest rebound from Q2’s plunge, early October data from UMich sentiment survey was expected to show the rebound continued, but it did not. Preliminary October sentiment slipped from 72.8 to 71.4 (well below the 73.1 expected). That is the second-lowest level since 2011, as Americans grew more concerned about both current conditions and the economic outlook.

The gauge of current conditions fell to 77.9, the lowest since April 2020. A measure of future expectations declined to 67.2

Source: Bloomberg

Democrats’ confidence picked up modestly in early October…

Source: Bloomberg

Buying Conditions for homes rebounded very modestly from 40 year lows but buying conditions for vehicles and appliances pushed to new record lows…

Source: Bloomberg

And finally, inflation expectations for the next year surged to their highest since 2008 (as longer-term inflation expectations dipped)…

Source: Bloomberg

“When asked to describe in their own words why conditions were unfavorable, net price increases were cited more frequently than any time since inflation peaked at over 10% in 1978-80,” Richard Curtin, director of the survey, said in a statement.