Consumer sentiment sours amid trade war, recession fears: Survey

[BumRushDaShow]

Source: ABC News

March 14, 2025, 10:08 AM


Consumer attitudes soured in March alongside slumping markets and growing concern about a possible recession, University of Michigan survey data on Friday showed. Sentiment worsened more than economists expected.

The figure marked the third consecutive month of dampening consumer attitudes, data showed.

Expectations about future economic conditions worsened in a slew of key areas, including personal finances, labor markets, inflation and stock markets, the survey said. Consumer sentiment soured among both Democrats and Republicans, though it dropped more among Democrats, data showed.

On Thursday, the S&P 500 closed down more than 10% since a peak attained last month, meaning the decline officially qualified as a market correction. It marked the index's first correction since October 2023. The major stock indexes recovered some losses in early trading on Friday.

Read more: https://abcnews.go.com/Business/consumer-sentiment-sours-amid-trade-war-recession-fears/story?id=119793665

[Bernardo de La Paz]

1. Fell off a cliff. 64.7 in Feb, econs expected 64 in March, they got 57.6. That's a cliff

But the market is up today, so tRump, Muck, and Litnick will ignore it. Today's jump is not unexpected after such a sustained fall, but I expect the fall will resume Monday. I of course really do not know.

[BumRushDaShow]

2. The markets were WELL overdue for a correction

But the next time some tariff threat happens, the markets will erase their gains being made today (that is what happened yesterday when they were coming back and then the "200% tariff" nonsense got mentioned, and LOOK OUT BELOW)!

The Dow hit it's all time high on 12/4/24 - 45,014.04

That would mean needing a 4,500 drop for a 10% correction, which would take it to ~40,514, and it closed yesterday at 40,813.57, so it was about there.

There has been (understandably) more fuss made about corrections on the other exchanges that have way more stocks.

[progree]

3. 12 month inflation expectation: from 4.3% to 4.9%, 5 year inflation expectation: from 3.5% to 3.9% (34 year high)

12 month inflation expectation: from 4.3% in February to 4.9% in March,

5 year inflation expectation: from 3.5% in February to 3.9% in March

A headline says that the inflation expectation is at a 34 year high
https://finance.yahoo.com/news/americans-sour-on-economy-as-inflation-expectations-hit-highest-level-since-1991-145631578.html

Pessimism over the inflation outlook soared again in March as one year-inflation expectations jumped to 4.9% from 4.3% the month prior. Just two months ago, consumers had only expected inflation of 3.3% over the next year.

Long-run inflation expectations, which track expectations over the next five to 10 years, climbed, too, hitting 3.9% in March, up from 3.4% in February. This marks the highest level of long-term inflation expectations since 1991. Also in the release, the expected change in unemployment hit its lowest level since the Great Financial Crisis.

There's a graph of the 5-10 year inflation expectation too at the finance.yahoo link above, as well as one of the Consumer Sentiment that's better than the one embedded below because it goes back to 2003.

==================================================

Someone in another thread asked why the consumer sentiment was still above 50%?

Ans: It's not a percentage. Rather it's some score that is indexed to 1966 = 100

http://www.sca.isr.umich.edu/

Chart: http://www.sca.isr.umich.edu/files/chicsr.pdf

Here's a better one from Yahoo Finance:


Here's one going back 50 years:
http://www.sca.isr.umich.edu/files/chicsh.pdf

Another going back to 2003 (22 years) is in this article:
https://finance.yahoo.com/news/americans-sour-on-economy-as-inflation-expectations-hit-highest-level-since-1991-145631578.html

==================================================

As for the market, A headline at Yahoo Finance says the market's climb today is relief that a government shutdown is likely to be avoided

but still the S&P 500 is headed for its 4th weekly loss, according to another article there.

https://finance.yahoo.com/

I've been tracking for several days the S&P 500's close each day in the Economy Group and comparing to some key dates,
https://www.democraticunderground.com/111699775
e.g. in part:

I only follow the S&P 500, as it is by far the best measure of the three (Dow, S&P 500, and Nasdaq) of the total U.S. stock market. But see bottom of this post for a graph of the DOW, which closed at 40,814, down 537 points (1.3%) for the day).

The S&P 500 closed THURSDAY March 13 at 5522 down 1.4% for the day,

and down 4.5% from the 5783 election day level,

and down 7.9% from the inauguration-eve level,

and down 6.1% year-to-date,

and down 10.1% from its all-time closing high of 6144 on Feb 19.

At the moment of this posting 1:56 PM CDT, with just over an hour to the close, the S&P 500 is at 5624, up 1.85% for the day so far

so subtract about 2% from all of the above numbers if the trend continues for the next hour, e.g. down about 2.5% from the 5783 election close, down 5.9% from the inauguration-eve level, down 4.1% year-to-date etc. ...