UMich Sentiment Catching Up with the (Good Financial) Information?

From TradingEconomics on 10/25:

The College of Michigan shopper sentiment for the US was revised increased to 70.5 in October 2024 from a preliminary of 68.9, marking a 3rd consecutive month of rises and reaching the best degree in six months. Each financial situations (64.9 vs 62.7) and expectations (74.1 vs 72.9) have been revised increased. This month’s enhance was primarily attributable to modest enhancements in shopping for situations for durables, partly attributable to easing rates of interest. The upcoming election looms giant over shopper expectations. Total, the share of shoppers anticipating a Harris presidency fell from 63% final month to 57%

It is a barely totally different take than what the NYT had on this topic. Right here’s an image of the Michigan sentiment index, with the Cummings-Tedeschi adjustment to the preliminary sequence, and the implied adjustment to the ultimate sequence.

Determine 1: UMich Shopper Sentiment (daring black, left scale), October preliminary (grey +), Shopper Sentiment adjusted per Cummings-Tedeschi (gentle blue, left scale), Cummings-Tedeschi including in ultimate vs preliminary hole (blue +), and Shapiro-Sudhof-Wilson Fed Information Sentiment (scarlet, proper scale), Supply: College of Michigan, Cummings-Tedeschi, SF Fed. 

Taking the adjustment actually, that is the image, in comparison with partisan group indicators (all unadjusted).

Determine 2: UMich Shopper Sentiment (daring black), for Democrats (gentle blue), for Independents (chartreuse), for Republicans (purple), Cummings-Tedeschi total sentiment including in ultimate vs preliminary hole (blue +). Supply: College of Michigan, Cummings-Tedeschi, and writer’s calculations. 

Lastly, notice that with the Cummings-Tedeschi adjustment, the Michigan indicator is extra consistent with the Convention Board and Gallup measures.

Determine 3: U.Michigan Sentiment adjusted to Cummings-Tedeschi April-October (daring black, left scale), Convention Board Confidence (teal, left scale), Gallup Ballot (purple, proper scale). Supply: U.Michigan through FRED, Cummings-Tedeschi, Convention Board, Gallup.