US consumer confidence past cycle-peak, University of Michigan says
(ShareCast News) - Consumer expectations continued to cool down, a possible indication that the cycle peak was now in the rear-view mirror, one of the most widely-followed surveys of sentiment in the US revealed.
The University of Michigan's consumer confidence index fell from a reading of 95.1 for June to 93.1 in July, according to preliminary results.
That was less than the print of 95.0 economists were looking for.
A sub-index tracking consumers' expectations did worst, retreating from a reading of 83.9 at the end of June to 80.2 at the start of July.
That sub-index was now 10.1 points below its the January 2017 peak.
In parallel, the other main sub-index, which gauges consumers' confidence in the current situation rose from 112.5 to 113.2 - its best reading since July 2005.
According to the survey's director, Richard Curtin, the data revealed that hopes for a prolonged period of 3% growth in gross domestic product after president Donald Trump's victory had already largely vanished.
The recorded declines were now consistent with GDP growth just above 2% in 2017, he said.
Curtin also pointed out how the subindices for expectations and the current situation were now carving out the standard pattern seen in the past after cyclical peaks, with expectations falling off even as sentiment around the current situation established new highs.
He added: "The weakness in the Expectations Index in early July was concentrated among Republicans (falling to 108.9 from June's 116.0 and February's 120.1); Democrats continue to hold much less favorable expectations, although the Expectations Index among Democrats has markedly improved (to 63.2 from June's 62.0 in June and 55.5 in February). Overall, the data indicate an annual gain of 2.4% in personal consumption during 2017."