Bankinter| University of Michigan Consumer Confidence (preliminary data for August) came out in line with expectations (71.2 points vs. 71.2 expected vs. 71.6 before).
Assessment: This is good news because Consumption is resisting inflation and rate hikes (+300 bps in 12 months to 5.25/5.50%). The strength of the labour market, where the Unemployment Rate is close to 40-year lows, and the good momentum in Services (PMI at 52.3 vs. ISM Manufacturing at 46.4) compensate for the tightening of financial conditions. Most importantly, the Inflation Outlook is now deflating. CPI expectations for the next 12 months slacken to +3.3% (vs. 3.4% avg.) and drop to +2.9% (vs. 3.0% avg.) with a 5/10-year outlook.
