Consumer Sentiment Falls to Decade Low, Inflation Starts to Moderate, and Growth Slows in China
August 16, 2021 | FIRESIDE CHARTS
The University of Michigan consumer sentiment index fell to a pandemic-era low of 70.2 this month—suffering its worst negative surprise on record—as hospitalization of children with Covid-19 hit a record high, as do hospitalizations for Americans 30-39. Inflation remains a concern, particularly for those with memories of ‘70’s era “stagflation”, as CPI continued to run hot in July at 5.28%. Its moderation from June though offers some encouraging signs that gains may have peaked. How will the issue be compounded in the long term though by fewer “prime age” people across the globe entering the workforce as boomers retire and civilian population growth continues to slow? Looking to China, July data is pointing to an ongoing economic slowdown. Retail sales unexpectedly declined last month and the PPI-CPI gap has blown out, which could pressure corporate margins or inflation pass-throughs.
1. The University of Michigan consumer confidence report had its worst decline ever.
Source: The Daily Shot, from 8/16/21
Source: The Daily Shot, from 8/16/21
2. Why do Boomers react so to inflation? This is what they grew up with…and it is not fun:
Source: The Chart Store, from 8/16/21
3. Fewer “prime-age” workers across the globe (trough between Baby-Boomers and the Baby-Boom Echo) will be a headwind for economic growth over the next decade:
Source: JP Morgan, from 8/16/21
4. “Exhausted” by their recent push, many metals are under some selling pressure:
Source: The Chart Store, from 8/16/21
5. China appears to be going back into the slow growth regime:
Source: The Daily Shot, from 8/16/21
6. Full normalization?
Source: The Daily Shot, from 8/16/21
7. Will we see margin pressures, inflation pass-throughs, or some of both?
Source: BCA Research, from 8/16/21
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