Michigan Sentiment (Prel) Surprises on the upside. But the disjuncture between (inverted) misery and sentiment (and confidence) continues.

Figure 1: Michigan Consumer Sentiment (blue, left scale), and Conference Board Consumer Confidence (tan, left scale), both normalized to 2021M01=0; and inverted Misery Index (green, right inverted scale). November Misery Index uses nowcast for CPI as of 12/8/2023. NBER defined peak-to-trough recession dates shaded gray. Source: University of Michigan via FRED, Conference Board, BLS, NBER, and author’s calculations. 

Note that while the Conference Board confidence index has risen since Biden’s inauguration, it also remains somewhat disconnected from the Misery Index.

Mechanically, the disjuncture can be partly ascribed to differences in weights on uemployment vs. inflation (see here).

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