The University of Michigan has released its preliminary survey of consumer sentiment for September. The index reading came in at 92.0, a gain from the 89.8 reading in August. While this was an improvement even with the trade war weighing on the minds of consumers, Dow Jones and Econoday were both showing an economist consensus estimate of 91.0. This rebound also is coming off a low that had not been seen in nearly three years.

One issue that cannot be ignored is just how deeply each person’s politics plays into “sentiment” at any given time. The survey had a table showing the readings of sentiment for Democrats, Republicans and independents, and the readings are so far apart that it’s fair to ask if sentiment and confidence are even relevant. Through time, and without much surprise, those who identify as independent voters tend to be in between the views of Democrats and Republicans.

According to the University of Michigan, the current conditions index rose to 106.9 from 105.3 and the future expectations index rose to 82.4 from 79.9. Some 38% of all consumers made spontaneous references to the negative impact of tariffs in the U.S./China trade war, and those who negatively mentioned tariffs also were more negative about the economy and anticipated a rise in inflation and unemployment.

As far as how this report is calculated, the Consumer Survey Center asks questions to 600 households each month (versus roughly 3,000 for the Conference Board’s Consumer Confidence Index) about their financial conditions and views about the economy. The report is viewed as a live gauge on the economy because roughly 70% of gross domestic product in the United States is tied to consumer spending activities. This is a preliminary reading, and the revision and update will be announced in two weeks.

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