As Stocks Soar To Record High, Americans" Consumer Confidence Tumbles In November

Despite soaring stock market values and an endless array of postive survey data from various estabishment-based entities, University of Michigan confidence tumbled in November.

Consumer sentiment in the U.S. cooled for a second month. While current conditions managed to improve, expectations for the future slumped...

“Perhaps the most important changes in early December were higher income expectations as well as a higher expected inflation rate in the year-ahead,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement.

“The rise in inflation expectations in early December was a surprise, and confidence in this finding must await confirmation in the months ahead before any inferences are drawn.”

UMich Consumer Confidence Slides In November As Faith In Stocks Falters

Having hit the highest level since Jan 2004 in October, November"s final print shows the University of Michigan Consumer Sentiment index fell from 100.7 to 98.5, as both hope and current conditions slipped.

Expewctations for inflation dipped. Consumers saw inflation rate in the next year at 2.5 percent after 2.4 percent the prior month. Inflation rate over next five to 10 years seen at 2.4 percent, lowest since May, after 2.5 percent in October

“Increased certainty about future income and job prospects has become a key factor that has supported discretionary purchases,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement.

 

“The data indicate that neither changes in fiscal nor monetary policies have yet had any noticeable impact on consumer expectations.”

The data signal consumer spending will rise 2.7 percent in 2018, adjusted for inflation, as well as “the best runup to the holiday shopping season in a decade,” the report said.

Finally we note that faith in the stock market faltered modestly...

Consumer Confidence Tumbles As Democrats' "Hope" Plunges Near Record Lows

After a couple of months of animal-spirit-inducing exuberance in soft-survey-hope-data, UMich consumer sentiment printed a disappointing 95.7 in Feb (versus 98.0 exp and down from 98.5 in Jan). The biggest driver was a notable drop in "hope" as Democrats Expectations plunged near record lows.

The Democrat’s Expectations Index is close to its historic low (indicating recession) and the Republican’s Expectations Index is near its historic high (indicating expansion). While currently distorted by partisanship, the best bet is that the gap will narrow to match a more moderate pace of growth. Nonetheless, it has been long known that negative rather than positive expectations are more influential in determining spending, so forecasts of consumer expenditures must take into account a higher likelihood of asymmetric downside risks.

Inflation expectations were mixed - rising in the short-term and dropping in the longer-term - which matches the markets inflation breakeven collapse...

Finally we note University of Michigan"s comments that when asked to describe any recent news that they had heard about the economy, 30% spontaneously mentioned some favorable aspect of Trump’s policies, and 29% unfavorably referred to Trump’s economic policies.

Thus a total of nearly six-in-ten consumers made a positive or negative mention of government policies. In the long history of the surveys, this total had never reached even half that amount, except for five surveys in 2013 and 2014 that were solely dominated by negative references to the debt and fiscal cliff crises.

Moreover, never before have these spontaneous references to economic policies had such a large impact on the Sentiment Index: a difference of 37 Index points between those that reported news of favorable and unfavorable policies. When the Sentiment Index was calculated by party affiliation, a nearly identical difference of 40 Index points was found between Democrats and Republicans. These differences are troublesome.

It seems the "soft" data surge is starting to fade...

Nearly Half Of Early-20s Millennials Still Get A Monthly Housing Allowance From Mom And Dad

In an age when our pampered, snowflake millennials can"t manage to engage in a simple conversation with someone holding a dissenting opinion, at least not without being "triggered" repeatedly by a barrage of "micro-aggressions", let along determine their own gender absent a pamphlet from their enabling college of choice, it should come as no surprise that nearly half of young adults between the ages of 22-24 receive monthly housing allowances from their parents. 

According to a study by Patrick Wightman of the University of Michigan, roughly 40% of millennials between the ages of 22-24 receive an average of $3,000 from their parents every year.  Per the New York Times:

According to surveys that track young people through their first decade of adulthood, about 40 percent of 22-, 23- and 24-year-olds receive some financial assistance from their parents for living expenses. Among those who get help, the average amount is about $3,000 a year.

 

It’s a stark reminder that social and economic mobility continues past grade school, high school and even college. Economic advantages continue well into the opening chapters of adulthood, a time when young people are making big personal investments that typically lead to higher incomes but can be hard to pay for.

Unsurprisingly, the frequency and amount of financial assistance varies greatly depending on each young millennial"s chosen field of study.  To our complete shock, "Art and Design" students are the most likely to require help from mommy and daddy and get $3,600, on average, each year. 

The amount of help that parents provide varies by career and geography. Among young people who aspire to have a career in art and design, 53 percent get rent money from their parents. Young people who live in urban centers are more likely to have their parents help pay the rent.

 

The choice of career path matters. Those in the art and design fields get the most help, an average of $3,600 a year. People who work in farming, construction, retail and personal services get the least.

 

Some jobs in science, technology, engineering, management and law have clearer and more substantial payoffs after years of internships and postgraduate training. But pay in art, design and education is low in the early years, and for some people, it remains low.

Someone who wants to go into graphic design or marketing requires a fair amount of time to get up to the point where you’re independent,” Mr. Wightman said. “Someone contemplating that kind of career isn’t going to take that first step unless they know they’re going to have that support to take an unpaid internship. If you don’t have other sources of support, that’s not even an option.”

Of course, the amount of annual parental support required by millennials is also highly dependent upon where they"re living.  We can"t honestly expect young Johnny or Susie to become wildly successful actors without living in Manhattan or Hollywood, now can we?

But don"t worry, young millennials, we"re sure everything will work out in due course...

Driverless Shuttles Hit Las Vegas: No Steering Wheels, No Brake Pedals

Submitted by Mike Shedlock via MishTalk.com,

Electric, driverless shuttles with no steering wheel and no brake pedal are now operating in Las Vegas.

There’s a new thrill on the streets of downtown Las Vegas, where high- and low-rollers alike are climbing aboard what officials call the first driverless electric shuttle operating on a public U.S. street.

The oval-shaped shuttle began running Tuesday as part of a 10-day pilot program, carrying up to 12 passengers for free along a short stretch of the Fremont Street East entertainment district.

The vehicle has a human attendant and computer monitor, but no steering wheel and no brake pedals. Passengers push a button at a marked stop to board it.

The shuttle uses GPS, electronic curb sensors and other technology, and doesn’t require lane lines to make its way.

“The ride was smooth. It’s clean and quiet and seats comfortably,” said Mayor Carolyn Goodman, who was among the first public officials to hop a ride on the vehicle developed by the French company Navya and dubbed Arma.

“I see a huge future for it once they get the technology synchronized,” the mayor said Friday.

The top speed of the shuttle is 25 mph, but it’s running about 15 mph during the trial, Navya spokesman Martin Higgins said.

Higgins called it “100 percent autonomous on a programmed route.”

“If a person or a dog were to run in front of it, it would stop,” he said.

Higgins said it’s the company’s first test of the shuttle on a public street in the U.S. A similar shuttle began testing in December at a simulated city environment at a University of Michigan research center.

The vehicle being used in public was shown earlier at the giant CES gadget show just off the Las Vegas Strip.

Las Vegas city community development chief Jorge Cervantes said plans call for installing transmitters at the Fremont Street intersections to communicate red-light and green-light status to the shuttle.

He said the city hopes to deploy several autonomous shuttle vehicles — by Navya or another company — later this year for a downtown loop with stops at shopping spots, restaurants, performance venues, museums, a hospital and City Hall.

At a cost estimated at $10,000 a month, Cervantes said the vehicle could be cost-efficient compared with a single bus and driver costing perhaps $1 million a year.

The company said it has shuttles in use in France, Australia, Switzerland and other countries that have carried more than 100,000 passengers in more than a year of service.

Don’t Worry Tax Drivers

Don’t worry taxi drivers because some of my readers say …

1. This will never work


2. There is no demand


3. Technology cost will be too high


4. Insurance cost will be too high


5. The unions will not allow it


6. It will not be reliable


7. Vehicles will be stolen


8. It cannot handle snow, ice, or any adverse weather.


9. It cannot handle dogs, kids, or 80-year old men on roller skates who will suddenly veer into traffic causing a clusterfack that will last days.


10. This is just a test, and testing will never stop.

Real World Analysis

Those in the real world expect millions of long haul truck driving jobs will vanish by 2020-2022 and massive numbers of taxi job losses will happen simultaneously or soon thereafter.

Yes, I bumped up my timeline by two years (from 2022-2024 to 2020-2022) for this sequence of events.

My new timeline is not all tremendously optimistic given the rapid changes we have seen.