The preliminary 98.8 reading of consumer sentiment by the Survey of Consumers indicates continued strength in May, unchanged from April. Current Economic Conditions ticked down slightly to 113.3, while the Index of Consumer Expectations rose 1.1 point to 89.5.
The changes are statistically insignificant. But the internals of the survey will thus provide some additional points for both sides in the debate about the timing and number of future interest rate hikes.
“What is likely to capture attention, however, are the small uptick in near term inflation expectations, the downward slippage in income expectations, and the expected stabilization of the national unemployment rate at decade lows,” Richard Curtain, the chief economist for the Survey of Consumers said.
“Eight-in-ten consumers anticipated interest rate hikes during the year ahead, and fewer consumers anticipated further declines in the unemployment rate–although all of the shift was toward the expectation of a stable unemployment rate rather than an increased rate.”
Worth noting, which Mr. Curtain did, American consumers have an impressive track record for anticipating and predicting changes in the actual unemployment rate.
“Overall, the data are consistent with a growth rate of 2.7% in real personal consumption from the second half of 2018 to first half of 2019.”