U.S. September Michigan CSI - Higher, including long-term inflation expectation
September’s preliminary Michigan CSI at 69.0 from 67.9 is slightly firmer, with both current conditions and expectations contributing. Inflation expectations are mixed, but a rise in the 5-10 year view outweighs a fall in the 1-year view.
Current conditions rise to 62.9 from 61.3, breaking a string of five straight declines from March’s 82.5. The rise is modest but suggests that the recent loss of momentum in the economy is stabilizing. Initial claims are giving a similar message in early September.
Expectations increased to 73.0 from 72.1, this a second straight increase and probably supported by expectations for falling rates. Politics may be playing a part. If both sides in a close race expect to win that could support confidence.
The 1-year inflation expectation slipped to 2.7% from 2.8%, and this is the lowest since December 2020. However a rise in the 5-10 year view to 3.1% from 3.0% is a disappointment even if only marginal. We have not seen a final monthly figure this high since November 2023, though the July preliminary reading rose to 3.1% before being revised to 3.0%, where the last five months have finished at.
