Expect Adjustments, Downward.

Macro Perspectives: Mon 15 Nov 21

Back in early August, we had just come out of the first half of the year, with the economy running at a better than 6% growth rate. Personal savings were at record levels. Jobs were plentiful, and at record high wages.

Despite the hot numbers, people were living a different story on the ground, emanating from a disruptive policy agenda in Washington.

With that, when the July consumer sentiment data came in (in early August), it was a shocker. Consumer sentiment dropped to a 10-year low… with expectations about the future at an 8-year low.

This, as forecasters were, at the time, looking for between 5%-7% annual rate of growth for the third quarter - the economy ended up growing at just 2% in the quarter.

Fast forward three months, and the consumer is even less optimistic. Friday morning, the October numbers came in.  Let's take a look...

The University of Michigan monthly survey of consumer sentiment is at another 10-year low.

Next, here's how consumers surveyed feel about current business conditions - the reading is back around pandemic lows and as you can see in the circled areas of the chart, it doesn't share good historical economic company.

Here's how consumers feel about the future? Consumers feel worse about the future than they did at the most uncertain depths of the pandemic/lockdown.

This all comes as the Atlanta Fed's GDP model is tracking 8% growth for Q4. The consensus economist community is projecting a little less than 5%.

Expect adjustments, downward.