UMich Confidence Bounces Led By Low-Income Optimism At 18 Year Highs

The final prints for UMich September data was slightly weaker than the preliminary prints but hope and current conditions did bounce MoM and did the headline.

Consumer sentiment remained at very favorable levels in September, with the Index topping 100.0 for only the third time since January 2004.

Most of the September gain was among households with incomes in the bottom third, whose index value of 96.3 was the highest since November 2000. In contrast, the Sentiment Index among households with incomes in the top third lost a total of 8.1% during the past seven months since reaching its cyclical peak of 111.9 in February 2018

In addition, consumers were slightly more likely to favor advance buying ahead of anticipated increases in interest rates and prices—favored by 20% for durables, 13% for vehicles, and 25% for homes.

Finally, we note that the year-ahead expected inflation rate was 2.7% in September, down from 3.0% in August and equal to last September’s figure (which was an accurate year-ahead forecast of the most recent change in the CPI). Long term inflation expectations fell to 2.5% in September from 2.6% in August and equal to last September’s figure.