April UoM Confidence was surprisingly weak, falling to 69.5 from 73.6 and is well below estimates of 75. It’s the lowest since Nov ’09 with both parts down. Current Conditions fell to 80.7 from 82.4 and the Economic Outlook dropped to 62.3 from 67.9, the lowest since Mar ’09 when it was at 53.5. Also of interest was one year inflation expectations rose to 2.9% from 2.7% to the highest since Oct ’09. The likely factor is gasoline prices which are at the highest level since Oct ’08 at $2.86 on average as it’s the most high profile pricing stat that consumers see every week. The weakness in confidence is likely due to a still tough labor market as while it is getting better, it’s not getting better fast enough. Confidence is also disconnected from the jump in consumer spending which has maybe been more led by pent up demand rather than a big change in income and job growth. People walking away from mortgages has also put extra cash in the pocket.
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