The University of Michigan Sentiment survey beat expectations with its preliminary August print (97.6 vs 94.0 exp) driven by a massive spike in 'hope' as currenct conditions slump to their weakest since Nov 2016.
How long will that 'hope' spike last?
As UMich details, half of all consumers in each of the last three Michigan surveys reported that their finances had recently improved, the best reading since 2000, the report showed. Americans were also upbeat about their financial prospects in the year ahead.
However, while noting that there were too few interviews were conducted following Charlottesville to assess how much it will weaken consumers' economic assessment, UMich goes on to warn...
The fallout is likely to reverse the improvement in economic expectations recorded across all political affiliations in early August.
Moreover, the Charlottesville aftermath is more likely to weaken the economic expectations of Republicans, since prospects for Trump's economic policy agenda have diminished.
Nonetheless, the partisan difference between the optimism of Republicans and the pessimism of Democrats is still likely to persist, with Independents remaining as the bellwether group. At this point, the data continue to indicate a gain of 2.4% in personal consumption expenditures in 2017.