Fri, 09/18/2020 – 10:10
The headline sentiment index for September advanced to 78.9 from a final August reading of 74.1, and well above the 75.0 expectations. That is the highest in 6 months (but well below the pre-COVID highs)
The measure of expectations rose 4.8 points to 73.3, also a six-month high, while a gauge of current conditions increased 4.6 points to 87.5.
Somewhat shockingly, only 16% of respondents said they expected the economy to worsen in the year ahead, the smallest share since 2015 and consistent with an economy and labor market that are slowly recovering.
“Over the next several months, there are two factors that could cause volatile shifts and steep losses in consumer confidence: how the election is decided and the delays in obtaining vaccinations,’’ Richard Curtin, director of the survey, said in a statement.
Additionally shocking is the fact that Democrats’ sentiment surged in early September…
Finally, despite The Fed’s best efforts to create and inflationary environment, sentiment on future inflation tumbled…
The Michigan surveys have traditionally asked consumers which candidate they thought would win the election, not whom they favored or how they intended to vote. The data from July to September indicate a virtual tie. This question has been asked since Carter ran against Ford in 1976, and in every presidential election, consumers correctly chose the winner, save one: when Trump ran against Clinton in 2016, two-thirds of consumers expected a Clinton victory. In one other election had the data been as close as now—in the 1980 election that had Reagan over Carter by one percentage point.
When consumers were directly asked which candidate would be better for the economy and for their personal finances, Trump was chosen over Biden as more likely to benefit the economy and their finances, although most consumers said there was no difference with regard to their own finances.
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Author: Tyler Durden