US: Expect steady reading for University of Michigan consumer sentiment - Nomura

In view of the research team at Nomura, consensus expects steady reading of 97.0 for the preliminary estimate of University of Michigan consumer sentiment for May.

Key Quotes

“In the final report for April, the University of Michigan consumer sentiment index ticked up slightly to 97.0 from 96.9, slightly below the recent high of 98.5 in January but still elevated. The partisan divide continued in this report. The current conditions index decreased slightly to 112.7 from 113.2 while the expectations index increased by a similar amount to 87.0 from 86.5. April saw a narrowing of the partisan expectations divide—the difference between self-identified Republicans (112.4) and Democrats (61.4) narrowed to 51.0 from 63.1 in March, but the divergence between political parties still remained stark. The group that moved the needle was self-identified independents, who maintained a favorable outlook for the economy. As long as they remain optimistic, the consumer sentiment index could remain elevated. As for the preliminary estimate for May, consensus expects steady reading of 97.0.”

“Regarding inflation expectations, the median of consumers’ 1-year and 5- to 10-year inflation expectations remained unchanged from March at 2.5% and 2.4% respectively. Longer-term inflation expectations have decreased mildly over the past 3 years but have recently stabilized somewhat after reaching a survey-low of 2.3% in December 2016.”