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Consumer Sentiment Slips From Early October As UMich Warns "Disinflationary Mindset Is Taking Hold"

There's good news and bad news. On the bright side, University of Michigan Consumer Sentiment rose from 87.2 in September to 90.0 in October, the first bounce in 4 months. On the not so bright side, the 90 final print is a significant drop from the 92.1 preliminary read (especially in light of equity's ongoing exuberance). Inflation expectations (short- and long-term dropped). The biggest driver of the bounce from September was, of course, hope - Future Conditions rose from 78.2 to 82.1 - while current conditions only rose from 101.2 to 102.3 (plunging from 106.7 prelim).

Not as awesome as it seems...

  • *CURTIN SAYS CONSUMERS HAVE LOWER ASPIRATIONS TO SPEND
  • *CURTIN: LONG-TERM INFLATION EXPECTATIONS MATCH RECORD LOW
  • *MICHIGAN'S CURTIN SENTIMENT GAIN LED BY LOWEST INCOME GROUP
  • *CURTIN SAYS CONSUMERS AWARE INCOMES WILL REMAIN CONSTRAINED

Bounce, but not much..

 

Expectations of higher incomes dropped to 4 months lows, and fewer respondents believe interest rates will rise in the next 12 months.

And then Curtin unleashed the following...

  • *CURTIN SAYS `DISINFLATIONARY MINDSET' IS TAKING HOLD
  • *CURTIN SAYS CONSUMERS CHANGED `YARDSTICK' IN MEASURING PRICES
  • *CURTIN SAYS CONSUMERS DEMANDING DISCOUNTS IN ORDER TO SPEND
  • *MICHIGAN'S CURTIN SAYS CONSUMERS DISAPPOINTED WITH DISCOUNTS
  • *CURTIN SAYS INFLATION YARDSTICK NOW SIMILAR TO 1950S/1960S
  • *CURTIN SAYS ANY INCREASE IN INFLATION WILL HARM CONSUMERS

With a final warning...

  • *CURTIN: FED NEEDS TO BE CONCERNED ABOUT BOTH SIDES OF INFLATION

Charts: Bloomberg