Whereas (last) sentiment as measured by the College of Michigan survey stays surprisingly downbeat given observables, the decline must be put into context.
Determine 1: College of Michigan Client Sentiment (blue, left scale), Convention Board Client Confidence (tan, left scale), Gallup Financial Confidence (mild inexperienced, left scale), all demeaned and normalized by customary deviation (for the displayed pattern interval); and Shapiro, Sudhof and Wilson (2020) Day by day Information Sentiment Index (black, proper scale). Gallup Could statement is the April 30 statement, and so on. The Information Index statement for Could is thru 5/19/2024. NBER outlined peak-to-trough recession dates shaded grey. Supply: U.Mich by way of FRED, Convention Board by way of Investing.com, Gallup, SF Fed, NBER, and writer’s calculations.
It’s attention-grabbing to consider who’s accounting for this pessimism. For the Michigan survey for which we have now a partisan breakdown, we will conclude that, relative to mid-2016, Republicans stay far more downbeat than both Democrats, or Independents. Why they’re so downbeat is difficult to say; it’s onerous to affiliate it with “news” as mirrored within the SF Fed’s information sentiment index.
