News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Breaking news

UK Prime Minister Boris Johnson Resigns

Consumer Are Surprisingly Confident About Income Expectations

Consumer Are Surprisingly Confident About Income Expectations

Dylan Jusino,

Talking Points:

- The final figure of the U. of Michigan Sentiment survey in November was 98.5 marking a +5.0% Y/y change

- Short-term inflation expectations was up 30 basis points over last month; long-term inflation was up just 10 basis points over the same period

- Consumers’ income expectations are resilient despite stagnant wages

- US Dollar Index trades in a narrow range following survey data

Curious as to where EUR/USD, GBP/USD, or USD/JPY are headed next? Be sure to sign up for our free Trading Forecasts.

Survey Data

Last month we received the preliminary University of Michigan Consumer Sentiment surveydipped below 100 at 97.8. In this morning’s final print narrowed the loss from the mid-month figure coming in at 98.5. This was still below the decade-high peak in October (100.7). Overall, the Sentiment Index has remained largely unchanged since the start of the year holding at the highest levels since 2004.

Although, U. of Michigan reported that the degree of certainty with which consumers hold their economic expectations have changed. Consumers have expressed greater certainty about income, employment, and inflation expectations. The survey report found that the consumer’s increased certainty in income and employment, “has become a key factor that has supported discretionary purchases.” This is despite of the fact that this morning’s jobs report shows wages are actually mostly stagnant.

Oddly, the survey data indicates that changes in fiscal and monetary policies have yet to have any matieral impact on consumer expectations. Overall, the data signaled an expected gain of 2.7% in real consumption expenditures in 2018.

Below is a summary for the final results of the November University of Michigan Surveys:

Consumer Are Surprisingly Confident About Income Expectations

Chart 1: US Dollar Index 5-minute Intraday (December 8, 2017)

Consumer Are Surprisingly Confident About Income Expectations

Coming off of Non-farm Payrolls the US Dollar Index largely ignored the survey data. DXY traded about 10 basis points higher but quickly retraced to the pre-data 93.92 level.

--- Written by Dylan Jusino, DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES