The Michigan sentiment drop to a 13-month low
The Michigan sentiment drop to a 13-month low of 87.9 from 91.2 in September and 89.8 in August left sentiment further below the 11-month high of 94.7 in May and the 98.1 cycle-high in January of 2015 that marked the strongest reading since January of 2004. Confidence faces ongoing support from stock market and home price gains, low gasoline prices and an expected GDP bounce in the second half of 2016 after a three-quarter string of near-1% growth rates through Q2. Yet, ongoing restraint in confidence and producer sentiment suggests that the inventory headwind is lingering. Confidence also faces a headwind from the November elections. For other surveys, analysts expect a consumer confidence drop to the 101 area, following the September spike to a 104.1 cycle-high from 101.8 in August. The Bloomberg Consumer Comfort index has averaged 41.8 through the first two weeks of October, versus a 42.0 average in September and a 45.7 cycle-high average in April of 2015. The pattern of upward revisions in "final" Michigan reports has disappeared, given boosts in just six of the last fifteen months, and an average revision in 2016 of -0.1.