After surging to 14-year highs mid-2017, UMich sentiment survey has slide notably (to the lowest since July). Despite tax cuts and stock market exuberance, current conditions plunged to its lowest since the Nov 2016 election.
Inflation expectations ticked up (both short- and long-term).
Tax reform was spontaneously mentioned by 34% of all respondents; 70% of those who mentioned tax reform thought the impact would be positive, and 18% said it would be negative.
The disconnect between the future outlook assessment and the largely positive view of the tax reform is due to uncertainties about the delayed impact of the tax reforms on the consumers. Some of the uncertainty is related to how much a cut or an increase people, especially high income households who live in high-tax states, face.
Six-in-ten consumers reported that the pace of economic growth had recently improved in early January. While the majority expected good economic times during the year ahead, half of all consumers anticipated a growth slowdown during the next five years.
Was the middle of last year as good as it gets for sentiment?