It's Not 2017
As for official reads on Consumer Sentiment and Confidence report, the last iteration from the University of Michigan saw important highlights, including the foundation of confidence-anticipating higher wages and lower inflation (2.3% is a record low).
Higher incomes were expected by nearly two-thirds of all households, and when combined with lower expected inflation rates, a record number of consumers anticipated inflation-adjusted income gains in October 2019.
American households have never been this confident in higher wages, coupled with strong job security, which means they have the wherewithal to continue to power the U.S. economy higher.
If you’re worried this sounds like 2007, it does with one caveat: this time, we are buying stuff without refinancing our homes three times or overloading the credit card. In fact, household debt service payments as a percentage of disposable income are at a record low.
I have pointed out repeatedly that American households are not going to get over their skis for a long time with the memory of the Great Recession still firmly seared in their minds.
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