Photo: bzo, Flickr
The latest University of Michigan sentiment numbers (which came in very weak) underscore an emerging trend in the economy right now: There’s a pretty big gap between sentiment and “the data.”Sentiment, expressed by surveys (consumer surveys, NFIB small business, and yes, even the stock market, which is a daily survey) have been pretty ugly lately.
The data actually hasn’t been that bad.
Job numbers have actually been solid, with initial claims coming in below 400K this week.
The retail sales number that came out this morning was surprisingly strong.
Earnings for the quarter: Pretty excellent.
One of the two will have to give.
Either the market will rebound, and people will see that the freakout was unfounded (That’s basically the case made by Matt Busigin here) or the data will catch up to the downside, which would be bad.
PS: The latest rail traffic also confirms that things aren’t a total disaster.