US Consumer Sentiment Increases for First Time in Five Months

[BumRushDaShow]

Source: Bloomberg

August 16, 2024 at 10:00 AM EDT
Updated on August 16, 2024 at 10:16 AM EDT


US consumer sentiment rose in early August for the first time in five months on more optimistic expectations about their finances as inflation steadied.

The sentiment index climbed to 67.8 from 66.4 in July, according to the preliminary August reading from the University of Michigan. The median estimate in a Bloomberg survey of economists called for 66.9.

Consumers expect prices will climb at an annual rate of 2.9% over the next year, unchanged from the prior month, data Friday showed. They see costs rising 3% over the next five to 10 years.

The rise in sentiment was partially driven by President Joe Biden’s decision not to seek re-election, which he announced later in July. Confidence rebounded among Democrats after Vice President Kamala Harris stepped in as the party nominee.

Read more: https://www.bloomberg.com/news/articles/2024-08-16/us-consumer-sentiment-increases-for-first-time-in-five-months

[Bayard]

1. That's good news

I'm just sad that so much is being attributed to Joe Biden stepping down.

[BumRushDaShow]

5. Every damn news source I checked

said the same damn thing - most included that nonsense in their headlines.

The media moguls are a bunch of sick, obsessed and sadistic degenerates.

[progree]

9. Here's why

http://www.sca.isr.umich.edu/

[BumRushDaShow]

10. It makes zero sense

because the two were a "pair" - President and Vice President, supporting a "shared" set of policy positions.

IMHO, and you have seen this when despite the actually data trends, the "media narrative" refused to reflect those trends and instead chose to put an emphasis and magnification on the "the economy is not doing good" (despite strong employment), "we are headed for a recession" (despite a solid GDP), "interest rates are too high" (even though they neglect to look back at what the "typical" rates were for decades and "zero" shouldn't be their baseline), and similar reporting over the past 3 years.

Every single-point "downshifted" data release became "recession recession recession" and every "upshift" became "well maybe but..." and "this is why we should worry..."

So when one continues to pump out the "negative", that gets absorbed "by the masses".

That hearkens back to what happened with Carter and the whole "malaise" thing - although in his case, he got hit with multiple economic and political crises, but attempted to handle them. But it was too late and in swooped Raygun (with a choreographed entrance into the political scene).

In both cases, the now and the 40 years ago "narrative" was switched (and no data justified it) and voila! I recall how they handled the 2007/2008 collapse with Paulson waving around a 3-page "bailout".

[progree]

11. The uptick makes sense to me, actually I'm surprised that the uptick wasn't at least a little more.

See graph in #8 where the uptick is almost imperceptible on the graph (66.4 in July to 67.8 in August).

Most of the media narratives on the economy have pointed out the falling inflation and the strong job numbers too, but then yes, go on and on about how most people feel we're in a recession (which certainly doesn't make any sense), and inflation, while not increasing as fast, people are struggling with high prices -- a more than 20% increase in prices since 2019 (too few stories mention that the INFLATION-ADJUSTED average earnings of production and non-supervisory workers are higher than in 2019. Ditto for all private sector workers).

Including gloomy-on-the-economy people on DU - this is full of them today: (ETA the "gloomy on the economy" /Edit)

https://www.democraticunderground.com/10143291428

ETA: The article linked to in #1 of that thread is quite a read (even though I can't stand that smarmy little ... pictured in that article)

Somewhere I saw another thread like that today but can't find it in my history list. Houses are unaffordable, rent is unaffordable, child care is unaffordable, the interest rate on my credit card is 28%, yada/Edit.

[BumRushDaShow]

14. Thanks for that article link

Queued it up and read. I have a bunch of millennial nieces, one of whom is 32 and happily childless and making good money and traveling. My sis and BIL stayed on her (and helped) her with her student loans.

Really, every generation bemoans the exact same thing. What is different nowadays is that the minimum wage has stagnated since Raygun and that has basically backed everything else up. There also wasn't all this "easy credit" out there where teens have credit cards. It was cash and carry. The internet has served to magnifiy "wants" and made it easy to get, putting these young people into massive amounts of debt.

But as a note - your graph is interesting in that it reminds me of what happens when you say, accidentally bang your hand on the corner of a table. You feel that initial "shock" of pain and put some ice on it, which helps... but then days later, that is when you really start to feel it.

IMHO, that is what happened with COVID - the "shock", a delay as the pain was temporarily eased with stimulus, vaccines, and treatments, but then the underlying damage that was actually done made itself known, in essence, the equivalent to a nasty bruise (a whole upheaval of the job market as people died, quit, retired, or moved to other jobs, and of course the single-point-of-failure supply chain disruptions that in turn blew apart the "just-in-time" business models). That left us with the lingering soreness that is finally starting to ease.

ETA - meant to include a link to this that I saw today - https://www.axios.com/2024/08/16/economy-recession-unemployment-inflation (sums up what the yes-it-is/no-it-isn't thing)

[progree]

7. In fairness, that's coming from the consumer sentiment survey director. It's not the media that's making crap up out of

thin air
http://www.sca.isr.umich.edu/

Surveys of Consumers Director Joanne Hsu
Consumer sentiment was essentially unchanged for the fourth consecutive month, inching up 1.4 index points. With election developments dominating headlines this month, sentiment for Democrats climbed 6% in the wake of Harris replacing Biden as the Democratic nominee for president. For Republicans, sentiment moved in the opposite direction, falling 5% this month. Sentiment of Independents, who remain in the middle, rose 3%. The survey shows that 41% of consumers believe that Harris is the better candidate for the economy, while 38% chose Trump. In comparison, between May and July, Trump had a 5 point advantage over Biden on the economy. Overall, expectations strengthened for both personal finances and the five-year economic outlook, which reached its highest reading in four months, consistent with the fact that election developments can influence future expectations but are unlikely to alter current assessments. Survey responses generally incorporate who, at the moment, consumers expect the next president will be. Some consumers note that if their election expectations do not come to pass, their expected trajectory of the economy would be entirely different. Hence, consumer expectations are subject to change as the presidential campaign comes into greater focus, even as consumers expect that inflation-still their top concern-will continue stabilizing.

[comradebillyboy]

2. Perfect timing.

[IronLionZion]

3. Meanwhile GOP are bloviating about Soviet style price controls

[speak easy]

4. October 2012, 82.6

[progree]

8. Graph from Yahoo Finance from January 2003 onward

https://finance.yahoo.com/news/consumer-sentiment-rebounds-in-august-141655416.html
^-One can hover one's mouse over the graph to see individual data points - month/sentiment. Unlike the below image--



October of: 2008: 57.6, 2012: 82.6, 2016: 87.2, 2020: 81.8,
August 2024 (latest) : 67.8

[Clouds Passing]

6. Thanks for the uplifting post, BumRushDaShow

[PSPS]

12. Gee, I wonder what happened "in early August" that increased "consumer sentiment" on everything? (rhetorical)

[progree]

13. Dunno (edited to add; the interviews for this preliminary report ended August 12)

The "early August" economic reports:

# August 2 Payroll jobs increase by only 113,000, unemployment rises 4.1% to 4.3% highest since whenever.

# Stock market goes into a big dive and double-bottomed out Aug 3 and Aug 7, then started climbing (both the Dow and S&P 500)

# First good econ news was a drop (small, but in the right direction) in unemployment insurance claims Aug 8. Similarly Aug 15.

ETA Interviews for this preliminary Consumer Sentiment report ended Aug 12, so interviewees didn't see the 2nd drop in unemployment claims mentioned above, nor did they see the very good inflation reports of August 13 and 14/End Edit

# Very good inflation reports August 13 (wholesale prices) and August 14 (consumer prices)

# It was July 21 when President Biden announced he was stepping aside and endorsing Kamala Harris

Edited to add
https://data.sca.isr.umich.edu/fetchdoc.php?docid=73946

Surveys of Consumers
Interview Dates 2024

August
July 23 IW Begins
August 12 Prelim Ends
August 26 IW Ends