Rob Carnell, Chief International Economist at ING, suggests that in contrast to the recent downbeat US Conference Board survey of consumer confidence, the final release of the University of Michigan consumer confidence survey rose to 91.7, up from 90.7 with both the current conditions and expectations components improving.
“Inflation expectations on a 5-10Y range also rose slightly.
If we had to pick one of these two surveys, we would probably put our money on the Conference Board numbers. But the Michigan figures are more in line with very respectable January real personal spending just released. These rose 0.4% MoM. Together with a small upgrade to 4Q15 GDP, which is now reported to have risen by 1.0% QoQ, not the initial 0.7% (seasonally adjusted annualised rates), these data wrap up the week on a more positive note, though the contributions to this latest GDP number appear to be largely from much weaker imports, and more inventory building, and so offer few positive clues as to future growth.
As we head into payrolls later this week, there is still a distinct lack of clarity about where the US economy is headed. And given the nature of the non-farm payrolls jobs release, we may not be much the wiser by Friday, and in consequence, there is likely to still be considerable uncertainty about the direction the Fed will be taking. Markets dislike uncertainty.”
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