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Lowest Consumer Sentiment Since 2011

DATA REACT
  • The surprisingly large drop in U.Mich consumer sentiment from 65.2 to 59.1 (cons 64.0) pushed it below March’s 59.4 to technically the lowest since 2011, with particularly broad-based declines.
  • Personal financial situation deteriorated further yet despite this and a gasoline prices rising to new highs, short-term inflation expectations were unchanged at 5.4% (small survey had 5.5%).
  • The more important 5-10Y measure was also unchanged, having plateaued at 3.0-3.1% sincen January, which combined with the recent slide in breakevens should help continue to calm FOMC fears that expectations aren’t becoming unmoored (and leans against the recent increase in the NY Fed’s 3Y consumer measure).
  • 2Y Tsys dip almost 2bps on the back of it but still +5.5bps on the day.

U.Mich 5-10Y expectations (green), NY Fed 3Y expectations (pink), 5Y5Y breakeven (white) and 5Y breakeven (yellow)Source: Bloomberg

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  • The surprisingly large drop in U.Mich consumer sentiment from 65.2 to 59.1 (cons 64.0) pushed it below March’s 59.4 to technically the lowest since 2011, with particularly broad-based declines.
  • Personal financial situation deteriorated further yet despite this and a gasoline prices rising to new highs, short-term inflation expectations were unchanged at 5.4% (small survey had 5.5%).
  • The more important 5-10Y measure was also unchanged, having plateaued at 3.0-3.1% sincen January, which combined with the recent slide in breakevens should help continue to calm FOMC fears that expectations aren’t becoming unmoored (and leans against the recent increase in the NY Fed’s 3Y consumer measure).
  • 2Y Tsys dip almost 2bps on the back of it but still +5.5bps on the day.

U.Mich 5-10Y expectations (green), NY Fed 3Y expectations (pink), 5Y5Y breakeven (white) and 5Y breakeven (yellow)Source: Bloomberg