Consumer Sentiment: Steady After Sharp Jump Earlier in Month

Bottom Line: The University of Michigan's survey index finished October above 100 for only the second time since the late 1990s. The survey noted: "more than half of all respondents expected good times during the year ahead and anticipated the expansion to continue uninterrupted over the next five years." While outlooks remain positive, inflation expectations remain quite muted with 1-year inflation expectations down to 2.7% and 5- to 10-year inflation expectations holding at 2.5%. Overall, sentiment remains positive with stock market gains and news of potential tax cuts boosting outlooks. That said, as the consumption component of this morning's 3rd Quarter GDP showed, there has been little follow through to actual, hard data from the elevated survey data we've seen for nearly a year now. Consumer Sentiment was REVISED DOWN by 0.4 points in late October to 100.7%, in-line with market expectations. Sentiment has improved by 7.3 points over the past 3 months. With this month's moderate increase, compared to September's final level of 95.1%, sentiment is 15.5% ABOVE its year ago level. Current Conditions were REVISED UP by 0.1 points to 116.5%. Current conditions are now 12.9% ABOVE their year ago level. Consumer Expectations were REVISED DOWN by 0.8 points to 90.5%. With this month's moderate increase, compared to September's final level of 84.4%, expectations are 17.8% ABOVE their year ago level.