Michigan consumer sentiment declined, below consensus (68.9 vs 70.9). Why?<\/p>\n
First, consider a text based index of economic news, compared against consumer sentiment disaggregated by partisan grouping.<\/p>\n
Figure 1:<\/strong>\u00a0University of Michigan Consumer Sentiment for Democrats (blue, left scale), for Independents (gray, left scale), for Republicans (red, left scale),\u00a0\u00a0Shapiro, Sudhof and Wilson (2020)<\/a> Daily News Sentiment Index (green, right scale). The News Index observation for September is through 10\/6\/2024. Source: U.Mich<\/a>,\u00a0SF Fed<\/a>.<\/em><\/p>\n Notice that Republican\/lead Republican sentiment declines even as text based news rises. The gap is more pronounced disaggregating Sentiment into Current conditions and Expectations, and focusing on Expectations.<\/p>\n Figure 2:<\/strong> University of Michigan Consumer Expectations for Democrats (blue, left scale), for Independents (gray, left scale), for Republicans (red, left scale),\u00a0 Shapiro, Sudhof and Wilson (2020)<\/a> Daily News Sentiment Index (green, right scale). The News Index observation for September is through 10\/6\/2024. Source: U.Mich<\/a>,\u00a0SF Fed<\/a>.<\/em><\/p>\n Republican\/lean Republican seems to have an outsize impact on the negative movements in the overall consumer sentiment, as shown over the long term picture here.<\/p>\n![\"\"](\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/umcsent_partisanpix2.png\")
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