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US Consumer Sentiment Still Robust

Sean Coakley March 16, 2018

Mar Feb Mar M-M Y-Y
2018 2018 2017 Change Change
Index of Consumer Sentiment 102.0 99.7 96.9 +2.3% +5.3%
Current Economic Conditions 122.8 114.9 113.2 +6.9% +8.5%
Index of Consumer Expectations 88.6 90.0 86.5 -1.6% +2.4%


 The University of Michigan’s consumer sentiment rose to its highest level since 2004 due to a new all-time high in the assessment of current economic conditions sub-index. Despite a downwards revision to February’s numbers, consumer confidence continues to read near all-time highs with preliminary figures for March showing a 102 reading against Feb’s 99.7 and last year’s 96.9 read.

The data did not have a palpable, immediate impact on the US dollar, but can be seen as ratifying that currency’s recent gains.

These latest data points mark some of the best reads seen in over a decade and illustrate how the combined effects of improved employment, tax cuts and modest wage increases have uplifted the animal spirits of the American consumer.

Looking at the hard data, this read contrasts with retail sales data for the month of February that disappointed, showing a decline in sales. Further, while consumer sentiment continues to hit records thus far in 2018, we have also seen a precipitous jump in market volatility and interest rates as well as lower than expected GDP growth

Bottom Line – While consumer sentiment has been trading high since the election of the presumably pro-business Donald Trump, hard data still suggest that the US economy is no bed of roses. Should sentiment abruptly catch up with reality, the market impact would be jarring.