Conflicting Measures

  • The Consumer Sentiment Index is a measurement by the University of Michigan.
  • The Consumer Confidence Index (CCI) is a survey conducted by the Consumer Conference Board.

Both purportedly measure the same thing. Clearly one of them is very wrong.

Tariffs Weaken Confidence

The University of Michigan reports Tariffs Weaken Confidence.

The Consumer Sentiment Index posted its largest monthly decline in August 2019 (-8.6 points) since December 2012 (-9.8 points), according to the University of Michigan Surveys of Consumers.

The 2012 plunge reflected widespread fears among consumers that they would be pushed off the “fiscal cliff” due to rising taxes and falling government spending, said U-M economist Richard Curtin, director of the surveys.

The recent decline is due to negative references to tariffs, which were spontaneously mentioned by one-in-three consumers, he said. Unlike concerns about the fiscal cliff, which were promptly resolved, Trump’s tariff policies have been subject to repeated reversals amid threats of higher future tariffs.

Such tactics may have some merit in negotiations with China but act to increase uncertainty and diminish consumer spending at home, Curtin said. Unlike the repeated tariff reversals, negative trends in consumer sentiment cannot be easily reversed.


“The August data indicate that the erosion of consumer confidence due to tariff policies is now well under way,” Curtin said. “Compared with those who did not reference tariffs, consumers who made spontaneous negative references to tariffs also voiced higher year-ahead inflation expectations, more frequently expected rising unemployment, and expected smaller annual gains in household incomes.

Biggest Drop Since 2012

Bloomberg reports U.S. Consumer Sentiment Falls Most Since 2012 on Trade Fears

Here's the paragraph that caught my eye.

The Conference Board’s confidence measure eased in August but posted the best assessment of current conditions since 2000. Bloomberg’s weekly comfort gauge rose for a second week, while the monthly expectations saw more Americans reporting the economy’s getting worse.

Sentiment: What are they Really Measuring?

Both surveys purport to measure the same thing. So what the hell are they really measuring?

I seldom follow these reports precisely because I believe the measurements are mostly nonsense.

Today's amusing report confirms my view.

Mike "Mish" Shedlock

Consumer Confidence Strongest Since December 2000: A Strong Contrarian Indicator?

Consumer Sentiment and Consumer Confidence are similar measures by two different organizations. The former is from the University of Michigan, the latter is by the Conference Board.

Consumer Sentiment Statistical Noise: Modern Day Snake Oil

Hooray! On March 17, the widely-followed University of Michigan Consumer Sentiment Index hit a 17-year high.

Consumer Confidence: Decidedly Lagging Indicator

Consumers have not been this confident since October 2000. Hooray?

Fed Minutes Show Reliance on Consumer Confidence, Sentiment, Soft Data: Balance Sheet Normalization

Schedule Set (It Won’t Be Met). The Fed released the Minutes of June 13-14 FOMC meeting today.

Australia "Cash Back" Government Scheme Fails to Inspire Consumer Confidence

Australia gave "cash back" in July to those making up to $126,000. The move failed to inspire consumer confidence.

Consumer Confidence Down 4th Time in 5 Months

Consumer confidence unexpectedly dropped in December, but from elevated levels.

Mortgage Purchase Applications Decline 4th Week, Refinancing Lowest Since 2000

Mortgage applications are yet another sign that housing has peaked this cycle.

More Headline Amusement: Consumer Sentiment Surges

Yesterday, we were told Fearful Investors Lost Faith in Trump.

PMI Services Lowest Reading in 5 Months; ISM Services Highest Reading Since October 2015

The regional economic reports from the Fed, as well as independent reports from the ISM, have been interesting to watch.