Inflation at 53-year low as QE money printing rages unabated!

[Tsing Tao]

Consumer confidence as part of an inflation conversation...oook. Let's talk about it. It's all driven by "hope!"

The Stunning Difference Between "Income Expectations" And Reality
It appears the burden of hope for the future of the American consumer, based on this morning's confidence survey data, is based on a surge in incomes. In fact, the income 'hope' index is at its highest since February 2008... which is odd given the utter stagnation of real wages. Perhaps the survey respondents have been listening to a little too much 'hope-and-change' TV promises of minimum wage hikes and fair livable wages and not enough paying attention to the layoffs, "M&A synergies", restructurings, and buybacks firms are actually undertaking, or as some call it, reality.

Shown on the chart below: the largest decoupling between reality and hope in the history of income reality vs expectations.





Peak Delusion indeed.

 

[Tsing Tao]

Here Is The Reason For The Surge In Consumer Confidence
Last month's sudden plunge (and biggest miss since Jan 2012) in Conference Board consumer confidence merely enabled an even bigger bounce this month. Consumer confidence surged to 94.5, its highest since October 2007, beating by the most since April 2013 (amid Ebola outbreaks). While the current situation was relatively flat, the surge in the headline data was purely due to a huge spike in future expectations from 83.7 to 95.0 - the highest since Feb 2011. Oddly, fewer people are likely to buy a car, major appliance, or house in the next 6 months but survey respondents expect a surge in incomes?

Hope is back at levels seen in 2005...





And this is where the surge came from:





Let's hope consumer confidence in hope is not misplaced...

 

[Scataphagos]

I believe "Consumer Confidence" measures are redundant.... tracks the stock market. If market is up, confidence up... vice versa. That's one of the primary reason the Fed juices the equity markets. So long as the market goes up, people are confident/hopeful and continue to spend/overspend.... makes politicians look less bad.

 

[Ricter]

I believe "Consumer Confidence" measures are redundant.... tracks the stock market. If market is up, confidence up... vice versa. That's one of the primary reason the Fed juices the equity markets. So long as the market goes up, people are confident/hopeful and continue to spend/overspend.... makes politicians look less bad.

The markets have been tanking for a month.

 

[Tsing Tao]

I believe "Consumer Confidence" measures are redundant.... tracks the stock market. If market is up, confidence up... vice versa. That's one of the primary reason the Fed juices the equity markets. So long as the market goes up, people are confident/hopeful and continue to spend/overspend.... makes politicians look less bad.

Spot on.

 

[Tsing Tao]

The markets have been tanking for a month.

The rapid decline began on the 8th. Most, but not all, survey data is received by then. There was only one additional week of time for survey results to be filed. (Oct 16th).

 

[Ricter]

The rapid decline began on the 8th. Most, but not all, survey data is received by then. There was only one additional week of time for survey results to be filed. (Oct 16th).

The CPI was down for September, on August's data, which was an up month for the markets.

 

[Tsing Tao]

The CPI was down for September, on August's data, which was an up month for the markets.

What does the CPI have to do with the market being up or down?

 

[Ricter]

What does the CPI have to do with the market being up or down?

CCI. So while markets rose for a month, consumer confidence fell. So much for Scat's dismissive, tight relationship between the measure and the markets.

 

[Tsing Tao]

CCI. So while markets rose for a month, consumer confidence fell. So much for Scat's dismissive, tight relationship between the measure and the markets.

But why did it fall? Do you even bother to look at the components?