TS Lombard with the terrifying analysis.
November consumer sentiment as tracked by the Conference Board was released and the spread between present and future expectations point to recession, perhaps one is already underway yet undated (doubtful). Overall sentiment increased, but because of an unusual downward revision of October’s number to 99 from 102, making the reported November 102 number suspect. Any number below 100 should make the WH more nervous than recent polling data. When sentiment is under 100 in the July of an election year, the party holding the WH loses (regardless of person or party). Probably also unnerving to the WH is that the economy, by traditional measures, no longer syncs to consumer sentiment about the nation, government, and presidents. For an administration that bought into the idea that a better economy earns votes, and enacted legislation to achieve this outcome, this is not good news. This disassociation has been underway for over a decade, at least. Perhaps we are measuring the economy all wrong in terms of understanding how people see growth intersecting with their lives.
The spread between sentiment regarding present conditions and future expectations peaks a median four months before the economy does (Chart 1). The current measure peaked in February and November’s 60.4 is the low mark of the year. The longest time span between peak and recession was nine months in 2007 and, assuming recession has not yet begun, we are nine months from the high.