Michigan Confidence Report Not a Useful Barometer of Recession Risk
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Today's Michigan Confidence report for December came in a little better than expected (75.5 actual vs. 74.5 forecast), but it is still at relatively low levels. As we did yesterday with the initial jobless claims report and the Philly Fed, below we highlight the historical trend of the Michigan Confidence report with recessions highlighted in red.
As the chart illustrates, at the start of the four recessions since 1978, Michigan Confidence was higher than the current levels in two periods and lower in the other two. Bottom line? Using the Michigan Confidence as a barometer of recession risks is not very useful.
click to enlarge
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This article has 1 comment:
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Will Rahal
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114 Comments
My Website
Dec 22 02:44 PMNon-Durable Consumption (associated with necessities like food and energy) has been increasing more rapidly than Durable Goods consumption(associated with discretionary spending).
The consumer has a propensity to spend, but now may not have the ability to do so.
I have posted charts showing the ratio of Non-Durable to Durable Goods Consumption and how this ratio behaves into mid-recession.
The level now is compatible with recessionary periods in the past.