The preliminary Michigan sentiment report revealed a lean September bounce to 71.0 from the 10-year low of 70.3 in August that undershot the pandemic bottom of 71.8 in April of 2020. The September bounce entirely reflected a rebound in expectations from an 8-year low, alongside a drop for current conditions to a new 17-month low. The 1-year inflation gauge bounced back to the 13-year high of 4.7% in September that was last seen in July, from 4.6% in August, while the 5-10 year inflation measure sustained the August rise to 2.9% from 2.8% in June and July.
The September bounce joins a decline in the IBD/TIPP survey to a 1-year low, but a rise in the weekly Langer index over the last four weeks above the 56.6 August average. We expect a bounce in the consumer confidence measure. We saw declines in all but the Langer index in August, and declines in all the measures in July.
- Michigan Sentiment rose to 71.0 from a 10-year low of 70.3 in August, versus an 88.3 cycle-high in April.
- Expectations rose to 67.1 from an 8-year low of 65.1, versus an 83.5 cycle-high in June.
- Current conditions fell to a 17-month low of 77.1 from 78.5, versus a 97.2 cycle-high in April.
- The 1-year inflation gauge bounced back to the 13-year high of 4.7% that was last seen in July, from 4.6% in August.
- The 5-10 year inflation measure edged up to 2.9% in August and September from 2.8% in June and July, versus a 10-year high of 3.0% seen in May, and previously in 2013.
The full set of confidence measures posted a July-August pull-back with headwinds from the delta variant, resumed mask requirements, and events in Afghanistan, following the prior confidence updraft with stimulus and vaccines has dissipated since April. Surveys available thus far in September suggest some flooring, and perhaps a rebound, after these summer declines.
Expectations rose to 67.1 from an 8-year low of 65.1, versus an 83.5 cycle-high in June, versus a 7-year low of 65.9 in both May and July of 2020 and an all-time low of 44.2 in July of 1979.
Current conditions fell to a 17-month low of 77.1 from 78.5, versus a 97.2 cycle-high in April, a 9-year low of 74.3 in April of 2020, and an all-time low of 58.9 in October of 2008.
The 1-year inflation gauge bounced back to the 13-year high of 4.7% that was last seen in July, from 4.6% in August, versus a prior 13-year high of 4.6% in May that matched highs in April and March of 2011. We saw a much lower 9-year high of 3.4% as recently as April. We saw a 2.1% cycle-low in April of 2020.
The 5-10 year inflation measure edged up to 2.9% in August and September from 2.8% in June and July, versus a 10-year high of 3.0% seen in May, and previously in 2013. We saw an all-time low of 2.2% in December of 2019.
For other September surveys, the IBD/TIPP index fell to a 1-year low of 48.5 from 53.6, versus a 1-year high of 56.4 in June, as seen in April. We saw a 59.8 high from the last expansion in February of 2020 and a 5-year low of 44.0 last July.
The Langer consumer comfort index has averaged 57.8 thus far in September, following a cycle-high monthly average of 56.6 in August, and a weekly high of 58.2 at the end of August. We saw a 6-year low for the average of 35.9 in May of 2020 and a 66.2 high for the last cycle in January of 2020.
We expect the consumer confidence index to bounce to 115.0 in September, after plunging to a 6-month low of 113.8 in August from 125.1 in July and a 16-month high of 128.9 in June, versus a 6-year low of 85.7 in April of 2020.
For final reports, the 0.1 August Michigan sentiment boost followed a 0.4% July hike but a -0.9 downward bump in June, leaving an average 2021 revision of 0.5. We saw average revisions of -0.4 in 2020, -0.2 in 2019, and zero in 2018.
