Today, the Confidence Council's consumer confidence index came in at 110.7, compared with Bloomberg's forecast of 103.8.this Michigan Consumer Confidence Survey The Conference Board's confidence survey deviated to a lesser extent from its historical correlation with inflation and unemployment. Interestingly, while Michigan's measures specifically deviated from text-based measures, they are all now beginning to return to text-based measures.
figure 1: University of Michigan consumer confidence (blue), Conference Board consumer confidence (tan) and Shapiro, Sudhoff, and Wilson (2020) Daily news sentiment index (green), both deflated and normalized by standard deviation (for the sample period shown). The December observations in Michigan are preliminary. December news index observations are as of December 10. NBER-defined recession peak-to-trough dates appear gray. Source: U.Mich (from FRED), The Conference Board (from Investing.com), SF FedNBER, and author's calculations.
To the extent that survey-based and news text-based series diverge, this provides some support for the following: resonance view The gloomy mood of the masses (conditional on the daily news index accurately summarizing the news).
The jump in the Confidence Council indicator was due to an increase in the status quo and expectations components.
source: confidence boardviewed on December 20, 2023.
Regarding the trend divergence between the (inverse) Pain Index and the Sentiment and Confidence Index, please refer to Figure 2 below.
figure 2: University of Michigan consumer confidence (blue, left scale), Conference Board consumer confidence (tan, left scale), both deflated and normalized by standard deviation (sample period shown). and the inverse distress index (green, right scale). The December observations in Michigan are preliminary. December news index observations are as of December 10. NBER-defined recession peak-to-trough dates appear gray. Sources: University of Michigan via FRED, The Conference Board via Investing.com, NBER, and author's calculations.
