US: Expect a small uptick in the University of Michigan sentiment reading - RBS

Research Team at RBS, notes that the University of Michigan’s consumer sentiment measure inched down for the third consecutive month to 89.8 in August.

Key Quotes

“The drop in August was solely attributable to a deteriorated assessment of current conditions by households. The expectations index recovered a fraction of the decline registered the prior two months. The University of Michigan noted that, “references to the presidential election continue to be a source of uncertainty about future economic policies”.

Meanwhile, other sentiment gauges have been somewhat mixed recently. The weekly Bloomberg Consumer Comfort Index improved a bit in the latest report, while the IBD/TIPP economic optimism index slipped. While election uncertainties will likely continue for the next few months, the positive impact of rising equity prices, combined with lower gasoline and food prices and some further improvement in jobless claims all bode well for consumer attitudes.

We expect a small uptick in the University of Michigan sentiment reading for early September, with the overall index perhaps edging to 91.0, close to the year-to-date average of 91.5.”