Confidence drops sharply

July preliminary UoM confidence was awful at 66.5 vs expectations of 74 and down from 76 in June. It’s the lowest since Aug ’09 and down from the highest since Jan ’08 in June, thus a sharp change. Current Conditions fell to 75.5 from 85.6 and the Outlook fell to 60.6 from 69.8. The Outlook is now at the lowest since Mar ’09 when it stood at 53.5. Inflation expectations ticked up by .1% to 2.9%. The UoM survey is via phone and done within the last few days so it is a timely snapshot of consumer sentiment. With a still sluggish labor market at the same time unemployment insurance is ending for many, we can fully understand the consumer nervousness.

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