Preliminary April expectations for University of Michigan's Sentiment Survey were for a further deterioration in Americans' confidence, but, despite collapse in President Biden's approval rating back to its lows, UMich surged higher in flash April data. The headline print exploded from 59.4 to 65.7 (against expectations of a drop to 59.0) thanks to a massive spike in 'hope' as Expectations jumped from 54.3 to 64.1 (vs 53.6 exp), bouncing of an 11 year low...
Source: Bloomberg
That is the biggest jump in expectations since Sept 2006.
Even UMich itself was shocked...
"Consumer Sentiment jumped by a surprising 10.6% in early April, although it remained below January's reading and lower than in any prior month in the past decade."
Nearly the entire gain was in the Expectations Index, which posted a monthly gain of 18.0%, including a leap of 29.4% in the year-ahead outlook for the economy and a 17.2% jump in personal financial expectations. A strong labor market bolstered wage expectations among consumers under age 45 to 5.3%-the largest expected gain in more than three decades, since April 1990.
Oddly, given the hype of hope, Buying Conditions remained extremely tepid!
Source: Bloomberg
And finally, and perhaps most importantly, inflation expectations remained at their highest since Dec 1981...
Source: Bloomberg
But don't worry, The Fed keeps telling us that 'inflation expectations remain well anchored"... oh and the subprime crisis is contained.
We leave the last words to UMich's Rich Curtin to steal the jam out of the hope-filled sentiment donut:"Nonetheless, the April survey offers only tentative evidence of small gains in sentiment, which...