The University of Michigan’s Index of Consumer Sentiment



Screenshot 2018-03-29 10.29.23

Consumer Sentiment Ends March at Cycle Highs

The University of Michigan’s Index of Consumer Sentiment edged down from earlier this month but it still at a cycle high of 101.4. Consumers’ assessment of the present situation is at its all-time high on income gains.

Confidence in Present Situation Boosted by Tax Cuts

  • Consumer sentiment improved further by the end of March after posting a fresh cycle high early in the month. The Index now stands at 101.4, up from 99.7 in February. 
  • Match’s gain was because consumers’ appraisal of the present situation improved from 114.9 in February to an all-time high of 121.2 in March on income gains from tax cuts and job prospects. Expectations slipped from 90.0 in February to 88.8 in March.

Poisitive Sentiment from Low End of Income Bracket

  • The notable takeaway from the March sentiment report is that much of the improvement came from the bottom third of the income distribution. Households in the bottom third income bracket are upbeat about tax cuts and the strong job market. Sentiment and expectations slipped among the top third, which cited concern over future government economic policy, notably trade, and were likely more cautious of recent market volatility.


From Surveys of Consumers chief economist, Richard Curtin. Richard Curtin

Screenshot 2018-03-30 04.16.55

Consumer sentiment at month’s end was marginally below the mid-month reading due to uncertainty about the impact of the proposed trade tariffs. The Sentiment Index, however, still reached the highest levels since 2004, and the Current Conditions Index set a new all-time peak. Importantly, all of the March gain in the Sentiment Index was among households with income in the bottom third (+14.1); those in the middle third were unchanged while the Index fell among household in the top third (-5.6). Households with incomes in the top third cited significantly greater concerns with government economic policies than last month, especially trade policies, with the net references falling from +31 to just +1, offsetting their positive reactions to tax policies. The consensus expectation among consumers is that interest rates will increase in the foreseeable future. While consumers view the current level of interest rates as still relatively low, they understand that interest rate hikes are intended to dampen the future pace of economic growth. Their reaction will both emphasize borrowing-in-advance of those expected increases as well as heighten their precautionary savings motives. The trade-ff between spending and saving will crucially depend on the pace of future interest rate hikes compared with the pace of income growth. It is likely that income growth will initially dominate, tilting consumers’ motives more toward spending than saving. Overall, the data are consistent with growth of 2.6% in consumption from mid-2018 to mid-2019.

Screenshot 2018-03-30 04.29.03


Screenshot 2018-03-30 04.29.27

Screenshot 2018-03-30 04.29.45

Screenshot 2018-03-30 04.27.25

Screenshot 2018-03-30 04.27.42

Screenshot 2018-03-30 04.27.45

Screenshot 2018-03-30 04.28.14

Screenshot 2018-03-30 04.28.28

Screenshot 2018-03-30 04.28.47

Because at 4:46 a.m. and working on an MVO model, this meme is comforting.



Survey Of Consumers, University of Michigan 

Wells Fargo Economic Group 

The MacroTourist 




Personal Income & Outlays


Screenshot 2018-03-29 00.57.11


Today in the economic news, the Bureau of Economic Analysis reported Personal Income increased $67.3 billion (+0.4%) in February.

Screenshot 2018-03-29 01.35.44

Disposable Personal Income increased $53.9 billion (+0.4%) and Personal Consumption Expenditures (PCE) increased $27.7 billion (+0.2%).

Real DPI increased +0.2%. Excluding food and energy, the PC price index increased +0.2%.

The increase in personal income in February primarily reflected increases in wages and salaries and nonfarm proprietors’ income.

Screenshot 2018-03-29 09.18.27.png

The $1.4 billion increase in real PCE in February reflected an increase of $1.0 billion in spending for goods and a $0.5 billion increase in spending or services.

Screenshot 2018-03-29 09.23.49.png

Within goods, recreational goods and vehicles were the leading contributors to the increase.

Within services, financial services and insurance was the leading contributor to the increase.

Personal outlays increased $27.8 billion in February. Personal saving was $497.4 billion in February and the personal saving rate, personal saving as a percentage of disposable income, was 3.4%. 

Personal Income increased 3.1% in 2017, compared with an increase of 2.4% in 2016. DPI increased 2.9% in 2017 compared with an increase of 2.6% in 2016.

In 2017, PCE increased 4.5%, compared with an increase of 4.0% in 2016.

Real DPI increased 1.2% in 2017, compared with an increase of 1.4% n 2016. Real PCE increased 2.8%, compared with an increase of 2.7% in 2016.

Screenshot 2018-03-29 08.42.07

Screenshot 2018-03-29 08.44.04

Screenshot 2018-03-29 08.55.54

Screenshot 2018-03-29 08.58.28

Screenshot 2018-03-29 09.03.14.png


BEA (U.S. Bureau of Economic Analysis) 


Trading Economics 


4Q & Annual 2017 Gross Domestic Product


Thomas Sully, 1818. Oil on Canvas

Screenshot 2018-03-29 00.57.11.png


The 4Q 2017 final U.S. GDP estimate got a sizable positive +40bps revision to the headline with consimption and investment providing the upside: 

  • Headline GDP was revised +40bps to +2.9% QoQ SAAR (the third consequitive quarter of GDP near 3%).
  • Year-over-year GDP was revised +10bps to +2.6%.
  • Personal Consumption growth was revised higher by 20bps to 4.0% QoQ SAAR, with a +17bps increase (from a contribution persepective) from Services & Non-Durables.
  • Most of the positive Investment juice came from the inventory side (contribution revised +17bps) while residential invetment was revised marginally lower and Non-Residential Investment was revised marginally higher.
  • GDP Deflator and Core PCE Deflator were unchanged at 2.3% and 1.9%, respectively. .






Screenshot 2018-03-29 01.22.40.png


Screenshot 2018-03-29 01.35.44


Screenshot 2018-03-29 01.29.08


Screenshot 2018-03-29 01.31.20





BEA (U.S. Bureau of Economic Analysis) 

Trading Economics 




Bear (Bar), ​Pending Home Sales


Gustave Caillebotte, Normandy Landscape, Oil on Canvas




Screenshot 2018-03-28 17.53.56.png


Right, how does it go again? Oh yea, ” As goes housing, goes the economy.”

Today in the economic news, the National Association of Realtors’ pending home sales index rose 3.1% on a MoM seasonal adjusted annual rate in February, bouncing back from January’s downwardly revised 5.0% drop.



Alas, following the sin curve.


On a YoY percentage basis, PHS was down -4.1%.


Pending Homes Sales Across All Regions

PHS regained a portion of last month’s drop, rising 3.1%. Year-Ago changes have decelerated in each of the past 3 months. Winter months can be deceiving, mainly if one winter is harsh as seems to be the case in 2018.

Digressing, where are /NG straddles priced?

That being said, in January, pending sales fell in every region due to winter storms muting activity. This month, all regions rose, led by the Northeast and South, rising 10.3 and 3.0%, respectively

Screenshot 2018-03-28 17.53.13.png

Strong Demand Not Matched by Supply

Seasonal factors have distorted monthly reading in 2018, but contract signings have been slowing on trend. Strong demand and a lack of supply have made it difficult for buyers to find a home.

Rising mortgage rates may cause some homeowners to remain in place to keep their current low mortgage rate. A growing share of consumers feels that now is an excellent time to sell a house, which hopefully will bring more supply to the market this spring.

  • United States MBA Mortgage Applications was reported at 4.8% in 23/March from -1.1% in the previous period. It was expected at -0.34%. 


  • United States MBA 30-year Mortgage Rate was reported at 4.69% in 23/March from 4.68in the previous period. It was expected at 4.67%.


Related to the featured picture. Which could be a euphemism for the bearish print in PHS today.  And I know the meme is derivative of Mr. Muir’s massive photo meme library, in which case, this only is a homage to him and my aspirations to write about markets like him.



National Association of Realtors 

Trading Economics 

Wells Fargo Economics Group 

The MacroTourist 


Consumer & Business Confidence Survey


Stepan Kolesnikoff, Rhythm of Shadows, Oil on Canvas. 


Screenshot 2018-03-27 10.35.03.png

The Conference Board Consumer Confidence Index® decreased in March, following an increase in February. The Index now stands at 127.7 (1985=100), down from 130.0 in February. The Present Situation Index decreased from 161.2 to 159.9, while the Expectations Index declined from 109.2 last month to 106.2 this month.

The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was March 15.

“Consumer confidence declined moderately in March after reaching an 18-year high in February,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions declined slightly, with business conditions the primary reason for the moderation. Consumers’ short-term expectations also declined, including their outlook for the stock market, but overall expectations remain quite favorable. Despite the modest retreat in confidence, index levels remain historically high and suggest further strong growth in the months ahead.”

Consumers’ assessment of current conditions eased in March. The percentage saying business conditions are “good” increased from 36.5 percent to 37.9 percent, however those claiming business conditions are “bad” also increased, from 11.3 percent to 13.4 percent. Consumers’ assessment of the labor market was marginally more favorable. Those claiming jobs are “plentiful” increased from 39.1 percent to 39.9 percent, while those claiming jobs are “hard to get” decreased from 15.1 percent to 14.9 percent.

Consumers were moderately less optimistic about the short-term outlook in March. The percentage of consumers anticipating business conditions will improve over the next six months decreased from 25.0 percent to 23.0 percent, while those expecting business conditions will worsen increased from 9.4 percent to 9.8 percent.

Consumers’ outlook for the job market was also less positive. The proportion expecting more jobs in the months ahead decreased from 22.4 percent to 19.1 percent, while those anticipating fewer jobs increased from 12.4 percent to 12.6 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement decreased from 23.5 percent to 22.0 percent, however, the proportion expecting a decrease also declined, from 8.6 percent to 7.2 percent.

Screenshot 2018-03-27 11.17.54

Consumer Confidence & Sentiment 

Screenshot 2018-03-27 10.36.41Screenshot 2018-03-27 10.36.49Screenshot 2018-03-27 10.36.59


Consumer Optimism 

Screenshot 2018-03-27 10.38.02Screenshot 2018-03-27 10.38.10Screenshot 2018-03-27 10.38.18

Consumer Confidence 

Screenshot 2018-03-27 10.39.22Screenshot 2018-03-27 10.39.29Screenshot 2018-03-27 10.39.41Screenshot 2018-03-27 10.39.49Screenshot 2018-03-27 10.40.00Screenshot 2018-03-27 10.40.08Screenshot 2018-03-27 10.40.17Screenshot 2018-03-27 10.40.26Screenshot 2018-03-27 10.40.32Screenshot 2018-03-27 10.40.39

Consumer Confidence & Unemployment 

Screenshot 2018-03-27 10.40.46Screenshot 2018-03-27 10.40.52Screenshot 2018-03-27 10.39.29Screenshot 2018-03-27 10.39.41Screenshot 2018-03-27 10.39.49Screenshot 2018-03-27 10.40.00Screenshot 2018-03-27 10.40.08Screenshot 2018-03-27 10.40.17Screenshot 2018-03-27 10.40.26Screenshot 2018-03-27 10.40.32Screenshot 2018-03-27 10.40.39Screenshot 2018-03-27 10.40.46Screenshot 2018-03-27 10.40.52

Consumer Confidence & Employment 

Screenshot 2018-03-27 10.44.39Screenshot 2018-03-27 10.44.45Screenshot 2018-03-27 10.44.52Screenshot 2018-03-27 10.44.59Screenshot 2018-03-27 10.45.04Screenshot 2018-03-27 10.45.10Screenshot 2018-03-27 10.45.17


Consumer Sentiment 

Screenshot 2018-03-27 10.47.22Screenshot 2018-03-27 10.47.27

Consumer Confidence By Region 

Screenshot 2018-03-27 10.50.13Screenshot 2018-03-27 10.50.19

Screenshot 2018-03-27 10.49.09Screenshot 2018-03-27 10.49.15

Screenshot 2018-03-27 10.49.22Screenshot 2018-03-27 10.49.28

Consumer Optimism Index 

Screenshot 2018-03-27 10.52.50Screenshot 2018-03-27 10.52.56

Jobs Plentiful & Wage Inflation

Screenshot 2018-03-27 10.54.02.png

Consumer Confidence & Wage Inflation 

Screenshot 2018-03-27 10.54.53Screenshot 2018-03-27 10.55.02Screenshot 2018-03-27 10.55.08Screenshot 2018-03-27 10.55.16Screenshot 2018-03-27 10.55.21Screenshot 2018-03-27 10.55.26Screenshot 2018-03-27 10.55.33Screenshot 2018-03-27 10.55.38Screenshot 2018-03-27 10.55.44Screenshot 2018-03-27 10.55.51Screenshot 2018-03-27 10.55.57



The Conference Board 

Yardeni Research