Skip to Content
May 11, 2018 Blog 1 min read
Jobs are plentiful and income growth is picking up, aided by reduced taxes for many households. The global economy is doing well despite the fractious environment in Washington and rising uncertainty on the geopolitical front. Consumers remain confident and upbeat.

Wealth Management consumer sentiment chart

The University of Michigan’s Consumer Sentiment index was unchanged at 98.8 in May, besting economist expectations for a modest decline.

Consumer sentiment has edged generally higher since the beginning of the year, bolstered by a strong labor market, rising home prices, and the near-term positive effects of tax cuts boosting worker paychecks. The assessment of the current state of the economy by consumers has been exceptionally strong for some time, despite modest slippage in the past few months.

Recent data shows signs of continued momentum in the economy. That strength is readily apparent in the 3.9% jobless rate (a 17-year low) and the continued decline in initial jobless claims, which recently fell to a level last seen in 1969 – just two examples that illustrate the strength in the U.S. economy.

Perhaps more notably, expectations in the near-term outlook are improving, despite the fact that most respondents expect further interest rate hikes to cool the pace of growth.

That expectation appears to be well founded given all indications from the Federal Reserve. At its last policy meeting, the Federal Open Market Committee held the funds rate unchanged, but policymakers continue to point to additional rate hikes in the pipeline before year end.

With more than two-thirds of U.S. economic activity driven by consumer spending, persistently strong consumer sentiment bodes well for both household spending and overall growth. The story for the U.S. economy remains a very good one.

Past performance does not guarantee future results. All investments include risk and have the potential for loss as well as gain.

Data sources for peer group comparisons, returns, and standard statistical data are provided by the sources referenced and are based on data obtained from recognized statistical services or other sources believed to be reliable. However, some or all information has not been verified prior to the analysis, and we do not make any representations as to its accuracy or completeness. Any analysis non-factual in nature constitutes only current opinions, which are subject to change. Benchmarks or indices are included for information purposes only to reflect the current market environment; no index is a directly tradable investment. There may be instances when consultant opinions regarding any fundamental or quantitative analysis may not agree.

Plante Moran Financial Advisors (PMFA) publishes this update to convey general information about market conditions and not for the purpose of providing investment advice. Investment in any of the companies or sectors mentioned herein may not be appropriate for you. You should consult a representative from PMFA for investment advice regarding your own situation.