A look at July:
Figure 1: University of Michigan Consumer Confidence Index (FRED UMCSENT series) (blue), Conference Board Confidence Index (beige), San Francisco Fed News Confidence Index (green), all normalized. July sentiment is preliminary; July news sentiment through July 21. NBER-defined peak-to-trough recession dates are shaded. University of Michigan via FRED, Conference Board, SF Fed, NBER, and author’s calculations.
Using a regression of UMCSENT on news sentiment over the above sample period (Adj. R2 = 0.41), the (preliminary) July observation is 7 points below reality, about 2 standard errors from the forecast.
