The good vibes in the bull market as it heads deeper into the late cycle were felt all the way down to the consumer as the University of Michigan’s Surveys of Consumers reported that sentiment hit 100.8 in September, outperforming expectations of 96.6 and posting the second highest level of the year.
According to Richard Curtin, chief economist for the Surveys of Consumers, the jump in consumer sentiment was “largely due to more favorable prospects for jobs and incomes. Consumers anticipated continued growth in the economy that would produce more jobs and an even lower unemployment rate during the year ahead.”
Source: tradingeconomics.com
Related: Consumer Inflation Rose At Slower Pace in August
The latest sentiment data hinted that the tit-for-tat tariff war between the U.S. and China have not been weighing too heavily on the minds of consumers. The markets got a boost this week when reports surfaced of renewed trade talks between the two economic superpowers.
“Concerns about the negative impact of tariffs on the domestic economy were spontaneously mentioned by nearly one-third of all consumers in the past three months, up from one-in-five in the prior four months,” said Curtin.
Retail Sales Rise At Slower Pace
Meanwhile, retail sales posted their smallest gain in the past six months as consumers scaled back on automobile and clothing purchases during the month of August. The Commerce Department reported today that retail sales advanced 0.1% last month, but at the smallest increment since February–however, data for July was revised to show a 0.2% increase over the initial reading of 0.5%.
A Reuters poll of economists forecasted that retail sales would rise 0.4% during the month of August. However, retail sales were higher by 6.6% compared to a year ago.
“The trend in retail spending is still solid, fueled by job growth and rising wages,” said Ben Ayers, senior economist at Nationwide. “We expect retail sales to pick up again in coming months to continue a strong 2018 for consumer activity.”
For more trends in fixed income, visit the Rising Rates Channel.