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Consumers Feel Better. But Rich Worry They Won’t Get Richer
US consumers are becoming more confident by the day, apparently, even as it will likely be quite a while before the pandemic completely fades from the memories of those lucky enough to have survived it.
University of Michigan sentiment hit the highest in a year in the final print for March. 84.9 on the headline gauge represented an uptick from the initial 83 reading, and a sizable advance from February's 76.8.
Unsurprisingly, free money and a scientific solution to a biological problem helped
I feel better when I look at FRED charts, even if they contain noise, like the noise suggesting that people are feeling like they’ve been ground down to a point where they really don’t care about optimistic news, probably because they’ve been burned out for a decade on hyper volatility and whiplash chaos.
I’ve ranted for years about CPI-based data, linked to Nielson survey participants being paid to send in their chaotic data — and I feel the same about the Michigan telephone/internet prepaid incentive approach*. I think the collective participation of a chaotic cohort, provides an ongoing chaotic data sample that makes far too much out of chaotic data trends — but, as usual, none of any of this really matters, but, it helps my blood flow.
https://fred.stlouisfed.org/graph/?g=ClQp
The RAND American Life Panel
Technical Description
University of Michigan MS Internet-panel cohort respondents are those recruited among
people ages 18 years and older who had responded to the MS of the University of Michigan’s
Survey Research Center (SRC). The MS is the leading consumer-sentiment survey, incorporating the long-standing Surveys of Consumers, and is used to produce the widely used Expectations Index.
I find it hard to compare two line series, so I like to plot the correlation coefficient. I’ve not figured out how to do this with FRED, so here’s a Koyfin version of GDP vs consumer sentiment: https://app.koyfin.com/share/12fd11fd3d
Assuming I’m not committing chart crime (a large assumption, but let’s roll with it) then the correlation reinforces Martha’s finding — over 25 years, consumer sentiment really does seem to be a reflection of recent GDP growth — but this chart reveals a period 2012-2018 where they decorrelated.