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US sentiment underlines K-shaped consumer strife
The University of Michigan sentiment index has improved to 48.9 from 44.8 (consensus 46.0), but this remains at very weak levels by historical standards. The chart below suggests the latest reading should be consistent with consumer spending falling around 1.5% year-on-year. However, consumer spending is being driven by higher-income households who are buoyed by big wealth gains, whereas sentiment reflects the median American. Unfortunately, they are seemingly finding the current economic situation much more challenging. Bureau for Labor Statistics data suggests the top 20% of households by income (those making $155k ... (full story)