Remember how Powell said he'll be looking at inflation expectations getting entrenched?
The Michigan surveys are one of the forward looking metrics of consumer sentiment and expectations.
It picked up this month but still low compared to last year and at the 2008 crisis level.
You can also notice how all the income groups agree on their assessment, with almost no spread, similar to what happened in 2009.
The YoY change in Consumer Sentiment, Consumer Expectations, and especially the perceived Economic Conditions are not looking great compared to 1 year ago when inflation was already high and conditions declining compared to the pre-pandemic levels.
On the bright side, the Consumer Expectations of the price changes (1-year inflation expectations) dropped a bit from 4.8% last month to 4.7% now.
So the consumers expect that the CPI inflation will stay relatively high at 4.7% the same time next year.
The longer-term expectations of the price changes dropped from 2.9% last month to 2.7% in September.
That means the majority of respondents think the CPI inflation will still be above the 2% mark in 5 years' time. But it's the lowest expectations among this year's surveys. 👏