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UMich Warns "Disinflationary Mindset Is Taking Hold" As Inflation Expectations Crash To Record Lows
There's good news and bad news. On the bright side, University of Michigan Consumer Sentiment rose from 87.2 in September to 90.0 in October, the first bounce in 4 months. On the not so bright side, the 90 final print is a significant drop from the 92.1 preliminary read (especially in light of equity's ongoing exuberance). Inflation expectations (short- and long-term dropped). The biggest driver of the bounce from September was, of course, hope - Future Conditions rose from 78.2 to 82.1 - while current conditions only rose from 101.2 to 102.3 (plunging from 106.7 prelim).
Not as awesome as it seems...
- *CURTIN SAYS CONSUMERS HAVE LOWER ASPIRATIONS TO SPEND
- *CURTIN: LONG-TERM INFLATION EXPECTATIONS MATCH RECORD LOW
- *MICHIGAN'S CURTIN SENTIMENT GAIN LED BY LOWEST INCOME GROUP
- *CURTIN SAYS CONSUMERS AWARE INCOMES WILL REMAIN CONSTRAINED
Bounce, but not much..
As expectations of good times ahead slide...
Expectations of higher incomes dropped to 4 months lows, and fewer respondents believe interest rates will rise in the next 12 months.
And then Curtin unleashed the following...
- *CURTIN SAYS `DISINFLATIONARY MINDSET' IS TAKING HOLD
- *CURTIN SAYS CONSUMERS CHANGED `YARDSTICK' IN MEASURING PRICES
- *CURTIN SAYS CONSUMERS DEMANDING DISCOUNTS IN ORDER TO SPEND
- *MICHIGAN'S CURTIN SAYS CONSUMERS DISAPPOINTED WITH DISCOUNTS
- *CURTIN SAYS INFLATION YARDSTICK NOW SIMILAR TO 1950S/1960S
- *CURTIN SAYS ANY INCREASE IN INFLATION WILL HARM CONSUMERS
With a final warning...
- *CURTIN: FED NEEDS TO BE CONCERNED ABOUT BOTH SIDES OF INFLATION
Charts: Bloomberg
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I need to start selling this hope thing.
Where can I buy it wholesale >
. . . "Where can I buy it wholesale"
At your local manure supply store.
In this survey 100 is "neutral" sentiment. Which we've been below for YEARS AND YEARS.
Even my wife has stopped buying stupid trinkets. Something is definitely amiss in the world.
Mine has done the same.
Decided to go to a local branch of a sports bar dining establishment... Its the first time my wife has ever said, "this really was a waste of money"... I was flabbergasted, and very happy.
The Walmart effect; it is horrendous and now reaching its absurd conclusion. Cutting margins to single digits is stupid. Crazy businesses will pursue this until someone crazier shows up and drives them out of business. Not a fan of single digit profits.
"CURTIN SAYS CONSUMERS HAVE LOWER ASPIRATIONS TO SPEND"
They also have lower wages to spend.
Decided to go to a local branch of a sports bar dining establishment... Its the first time my wife has ever said, "this really was a waste of money"... I was flabbergasted, and very happy.
I'm all for thrift, but going out to eat at a local establishment or spending your money on any other local businesses is a good thing. Your local businesses NEED your support.
I steered mine away from 'craft' shows many years ago.
A lot of it hand crafted locally.
We get enough of it for the holiday, much of it accidentally burns well in the fireplace.
Re gifting is not just for fruitcakes anymore.
The survey disclaimer should read: Sentiment data is all one big made up, goalseeked pile of bullshit.
It was a bit chilly recently.
doubly chilly
Paul Eberhart has aspirations. www.pauleberhart.com
These type of "how do you feel" reports are notoriously unreliable with regard to how the economy actually IS....and not particularly reliable with how consumers actually will spend.
Health insurance companies have been busy sending out cancelation & premium increase notices. Companies are also telling their employees how much their share of health insurance is going to cost next year.
I think this is having an impact.
I was told by BCBS Texas my PPO policy would no longer be offered - they recommended a new replacement plan that gives me much less coverage under an HMO - only covers in network service - higher deductible - no maximum out of pocket - higher copay
And only costs 44% more than my old plan.
I also got a letter from my doctor of 27 years - he is no longer going to be seeing any patients - he told me the new rules forced by Obamacare suck so bad he is going to retire early.
I seldom have any trouble in decision making, but Hyperinflation, Inflation and Disinflation all have persuasive arguments.
My best assumption is that the dollar bills from my mattress will buy less tomorrow than they will today.
Soooo, buy stawks?
Always and forever! Moar moar moar...
https://www.youtube.com/watch?v=lQV-w0pnZ3U
Academic Idiots: My ground beef still costs double what it did five years ago, yet most wages were and still are flat over same period. I guess the economy is ok when we buy two boxes of hamburger helper per lb. of beef intead of one. Geez, no wonder young adults still live at home. http://data.bls.gov/timeseries/APU0000703112
We are in deflation now.
Not all prices will go down in deflation. Take rent for an example
QE whatever is soon
Apparently no prices go down during deflation. I'd like a list of commodities that have seen falling prices since Q1 2015. Excrude.
The first phase of deflation is not prices but the collapse of spending. Vendors even raise prices for a while to make up knowing there is no future anyway. When the last of the desperate buyers capitulates, prices collapse without a lower bound until vendors start to disappear. Without vendors price becomes meaningless. But by then the system has clearly collapsed beyond a point from which it can recover.
in flyover country, prices are collapsing in the auto glass industry.
Coffee. Corn. NatGas. Lumber. Soybeans. Depending on exactly which time period you want, even Feeder Cattle and Lean Hogs.
Meat is a difficult commodity to use to pin price changes on inflation. When the price of feed grain rises, farmers liquidate herds because it's too expensive to feed them. Then when the supply of animals drops, supply/demand rears its head and there you are--high prices.
This chart of Lean Hogs shows the effect of market forces--NOT inflation. Lean hogs hit a low of $40 in March 15, down from over $75 just five months earlier. Then they rose back to $68 just a couple weeks ago, and now back down under $60.
http://www.finviz.com/futures_charts.ashx?p=d1&t=LH
Even things like rent aren't, IMO, reasonably explained by inflation; when so many people have lost their homes in the housing crisis, and so many can't buy their own home, all they can do is rent. Supply and demand again. Demand for rentals is up, ergo so is the price.
I'm not saying there aren't inflationary pressures, but much of what we might assume is the result of inflation is often conflated with other economic and demographic trends.
Yes, we are definately in deflation now. For some reason though major media etc. have been told to use the term 'disinflationary' instead. Deflation is a 'bad' word now.
So yes, more QE is a commin. And soon. They will dive this thing towards the ground and they will pin the throttles while doing it. All we can do is sit back, watch and let's see if they can out do Japan.
We are all passengers until this thing blows up.
The Japanese consumer is flat broke. The American consumers are living on credit. This game is completely over. If the Fed wait too long even money dropped from the sky won't save us.
Money dropped from the sky would do the OPPOSITE of saving us. Money out of thin air does not create wealth - it creates poverty. Otherwise the solution would be simple: give everyone a million dollars and we'd all be rich!
"Wealth" was the master illusion. Watch what happens next.
Really? 25 comments and no "Jane you ignorant slut!" Well of course inflation for the major majority sucks. I just want to know what, besides purchasing power (stagnant wages) is deflating. Don't see it in food prices, Insurance, median house prices, rent, property taxes, education and the Stawk Markit. Well at least gas is cheaper and I can purchase another TV even though we don't need another one. We can buy another computer even though we don't need one. We can buy a washer and dryer to go along with our other washer and dryer.
Inflation expectations at record lows?
Anyone saying there is no inflation is batshit crazy and fucking delusional.
Scrap metal prices have fallen through the floor ,thanks to China turning off demand. Do you know how many more cans I have to pick up now to maintain my current standard of living ? I will tell you, A Shit Load ! Soon it won't even be worth my time to steal ac parts from churches
"There's good news and bad news."
When news collides.
Zero Interest...Black Hole will swallow all!
it isn't a mindset. People can't spend what they don't have.
where you been the last 30 years? we all been spending what we don't have. the .gov been spending trillions of times what it don't have. party on garth.
in other news my house just gained another 5% and is worth over a million....though I can't afford to buy hamburg meat, my property taxes...all is great....believe the lies
This is what happens when you leave rates at zero for 7 years causing lots of M&A related layoffs/minimal investment/maximum debt funded buybacks while starving people of jobs and interest income. Then, for good measure, you tell people that to 'help' them even more, you are thinking of stealing money from their bank accounts via NIRP.
People are acting rationally, given the facts and circumstances that idiotic policy has created.
Wonder if TRILLIONS in global debt have anything to do with it. But I only gave a lower grad degree, I'll yield to the Phd's. They obviously know better than I.
Wonder if TRILLIONS in global debt have anything to do with it. But I only have e a lower grad degree, I'll yield to the Phd's. They obviously know better than I.
Wonder if TRILLIONS in global debt have anything to do with it. But I only have e a lower grad degree, I'll yield to the Phd's. They obviously know better than I.
Triple post, my bad
My household has cut back discretionary spending to the bone.
Now I'd just like to see SOME F*CKING OVERPRICED RETAIL STOCKS OWNED BY THE INVESTOR CLASS/1%, ETC GET HAMMERED SO THEY CAN (FINALLY) JOIN THE CLUB.
thank you for this public service ZH.
I feel much more comfortable with my leveraged tax free bond position now.
i love G-d
DEFLATION STARTED! http://forum.prisonplanet.com/index.php?topic=80429.msg1559610#msg1559610
DEFLATION IS GOOD.
DEFLATION IS NATURAL.
DEFLATION IS WONDERFUL.