·
The preliminary reading of April consumer sentiment from the University
of Michigan
fell another 9.1% m/m to 63.2. Consensus
expectations had been for a lesser decline to 69.0. The decline
dropped sentiment to near its lowest level since 1982.
· The expectations component accounted for the largest part of the decline in April sentiment with an 11.1% m/m drop. The index is at its lowest since 1990. Expectations for personal finances fell out of bed with a 13.4% m/m drop (-23.6% y/y). Expectations for business conditions during the next year also fell a hard 8.7% (-51.7% y/y). Expectations for conditions over the next five years fell 11.1% m/m (-20.0% y/y).
· Opinions about government policy, which apparently influence economic expectations, fell 4.4% m/m (-28.6% y/y). The percentage of those surveyed who indicated that they thought government was doing a good job fell to the lowest level since 1992 and 43% had a poor opinion.
· The mean expectation for
inflation during the next twelve months rose again last month to 5.6%,
nearly the highest
level since 1990.
· The current conditions index fell 6.9% m/m after a slight rise during March. The view of current conditions for buying large household goods fell hard (-24.3% y/y) and the view of current personal finances also fell sharply (-26.9% y/y).
· The University of Michigan survey is not seasonally adjusted. The reading is based on telephone interviews with about 500 households at month-end; the mid-month results are based on about 300 interviews. The summary indexes are in Haver's USECON database, with details in the proprietary UMSCA database.
· The Consequences of Mortgage Credit Expansion: Evidence from the 2007 Mortgage Default Crisis from Atif R. Mian and Amir Sufi at the University of Chicago can be found here.