Bloomberg
The numbers: The University of Michigan’s consumer sentiment index was unchanged at 98.8 in the early May reading.
What happened: While overall sentiment was unchanged, there was some movement within the Michigan index. Consumers’ views of the current situation slipped 1.6 points, while the expectations component gained 1.1 points.
Economists had forecast a reading of 99.
More important was an uptick in coming-year inflation expectations, to 2.8% from 2.7%, and a decline in income expectations. What’s more, fewer consumers anticipated additional declines in the unemployment rate, the survey director, Richard Curtin, noted in a release. “Consumers have a remarkable track record for anticipating changes in the actual unemployment rate,” he added.
The big picture: Survey respondents may be right about further improvement in the job market. The unemployment rate in April touched a low not seen since the dot-com boom. The economy is growing, but as the survey noted in April, many Americans are aware that it’s been a long expansion already.
The data in early May signalled a 2.7% personal consumption growth rate, according to the survey director. And consumers are spending: same-store sales for the restaurant sector hit the best showing in three years in April, according to Black Box Intelligence. Weekly sales from over 30,000 restaurant units showed 1.5% annual same-store growth during the month, the group said Friday.
Market reaction: There wasn’t a big stock market reaction to the news, with the Dow Jones Industrial Average up 93 points in morning action. Over the last 52 weeks, the Dow is up about 19%. The yield on the 2-year note , which is sensitive to anticipated Federal Reserve action, edged up to 2.539%.