Consumer Sentiment Turns Down Sharply

From Bloomberg:

Consumer sentiment has fallen deeply the last two weeks in a surprise that indirectly points to trouble in the labor market. The mid-month consumer sentiment index fell to 69.5 vs. 73.6 in March. Deterioration is deepest in the leading component, expectations, which fell 5.6 points to 62.3 and a level last seen mid-year last year when payrolls were still declining severely. Current conditions also fell, down 1.7 points to 80.7. One-year inflation expectations are no help, rising 2 tenths to 2.9 percent though the gain is seasonally tied to rising gasoline prices at this time of year.

This report will raise questions whether two weeks of increases for jobless claims reflect, not administrative snags, but actual layoffs. Certainly, today's results are not consistent with the major increase for April payrolls that many are talking about. Stocks, commodities and the dollar are all moving lower in initial reaction to this report, one that may very well weigh on these markets through the session.

Market Consensus Before Announcement
The Reuter's/University of Michigan's Consumer sentiment index moved upward the second half of March, coming in at 73.6 for the final reading, compared to the mid-month reading of 72.5. The improvement was primarily due to a rise for the current conditions index to 82.5 from mid-month's 80.8. The expectations index rose only seven tenths from mid-month to 67.9. Due to the dip in the headline number at mid-month, the final overall March reading was unchanged from February. Looking ahead, stabilization in unemployment and the improved likelihood of continued gains in employment may boost confidence in April.


Note that consensus was for a reading of 75 rather than 69.5!

If team Obama with their latest ridiculous idea of going to Mars do not get their collective heads out of the sand and stop spending money, the bond market will throw up all over the US economy.

Then the fun will begin once interest rates start to move upward at a rapid velocity!