UMich Sentiment Sinks In September, Inflation Expectations Rise Intramonth

With PCE stickier than expected this morning (echoing similar trend sin CPI and PPI last week), expectations for UMich inflation outlooks was for a modest rise from the preliminary September prints, and they did with 1Y rising from 3.1 to 3.2 and 5-10Y rising from 2.7 to 2.8% – but they were both down from August’s levels…

Source: Bloomberg

So sentiment is seeing slowing inflation, but the market is seeing re-acceleration…

Source: Bloomberg

The final print for UMich Sentiment was very slightly better than the preliminary print but was also lower than August – a small decline in consumer expectations over their personal finances was offset by a modest improvement in expected business conditions

Surveys of Consumers Director Joanne Hsu comments that “Consumers are understandably unsure about the trajectory of the economy given multiple sources of uncertainty, for example over the possible shutdown of the federal government and labor disputes in the auto industry.“

“Until more information emerges about these developments, though, consumers have reserved judgement on whether economic conditions have materially changed from the past few months.”

Finally, we dust off this old analog – when buying conditions for household durables come under pressure, unemployment has tended to rise…

Source: Bloomberg

…except, this time is/was different. Or is the unemployment rate about to start catching UP to reality?