Today's Report (10/29/2021)

Consumer sentiment remained virtually unchanged from its mid-month reading, gaining just 0.3 Index points, and just 0.1 Index points above the average in the past two months, and only 0.1 Index points below the April 2020 low. The positive impact of higher income expectations and the receding coronavirus has been offset by higher rates of inflation and falling confidence in government economic policies. Consumers not only anticipated the highest year-ahead inflation rate since 2008 in the October survey, but consumers also expressed greater uncertainty about the year-ahead inflation rate than any time in nearly forty years. Even uncertainty about the long-term inflation rate was the highest in more than a decade. Declining living standards due to inflation were spontaneously mentioned by one-of-every five households, concentrated among older and poorer households.

What is it?

This is a monthly survey of US consumer confidence about the national economic conditions. It tries to gauge the consumer's future purchasing plan. It is a near real-time assessment of consumer attitudes on business climate, personal finance, and shopping.

Data is collected up to a day or two before the official release.

It questions 500 respondents

University of Michigan 1 YR Inflation

University of Michigan (UoM) Inflation Expectations measures the percentage that consumers expect the price of goods and services to change during the next 12 months. There are two versions of this data released two weeks apart, Preliminary and Revised. The preliminary release is the earliest so tends to have more impact.

What are the fundamental effects?

It is a proven accurate indicator of the future course of the national economy. Higher consumer sentiment could lead to higher inflation.

How does it affect the markets?

CURRENCY - Foreign investors favor happy American customers, as personal spending increases.

STOCKS - The equity market prefers when consumers are confident because they are more likely to take more risky investments.

BONDS - As consumer sentiment rises it could mean that’ll spend more on riskier investments, which could lead to bond prices being reduced and yields rising to attract more investors.