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 normal deviation (for the displayed pattern interval); and Shapiro, Sudhof and Wilson (2020) Each day Information Sentiment Index (black, proper scale). Gallup Might remark is the April 30 remark, and so forth. The Information Index remark for Might is thru 5/19/2024. NBER outlined peak-to-trough recession dates shaded grey. Supply: U.Mich through FRED, Convention Board through Investing.com, Gallup, SF Fed, NBER, and creator’s calculations.
It’s attention-grabbing to consider who’s accounting for this pessimism. For the Michigan survey for which we now have a partisan breakdown, we can conclude that, relative to mid-2016, Republicans remain much more downbeat than either Democrats, or Independents. Why they’re so downbeat is difficult to say; it is hard to associate it with “news” as mirrored within the SF Fed’s information sentiment index.