Consumer Confidence vs Real Spending
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
Consumer confidence surveys capture how people feel, while PCE measures what they actually do. The gap between attitude and action has widened since COVID. Consumers report feeling terrible about the economy while continuing to spend at healthy levels. This "vibecession" dynamic matters because the economy ultimately follows spending, not feelings.
Cross-Asset Analysis
This page pairs Consumer Sentiment (Michigan) (university of Michigan consumer sentiment index, how consumers feel about the economy) against Real Personal Consumption (inflation-adjusted consumer spending, ~70% of US GDP) to surface the specific macro signal that lives in the peer pair relationship. Performance attribution leans on Consumer Sentiment (Michigan)-Real Personal Consumption spreads to separate security selection from style allocation inside multi-manager mandates. Corporate action events, including buybacks or spin-offs affecting constituents of Consumer Sentiment (Michigan) or Real Personal Consumption, can distort the spread relative to its intended factor tilt.
Factor exposures embedded inside Consumer Sentiment (Michigan) and Real Personal Consumption drive their relative performance, with growth-value, large-small, and domestic-international all surfacing in the spread. Pairs like Consumer Sentiment (Michigan) and Real Personal Consumption trade tighter than either leg does individually, because the common component is high and the remaining idiosyncratic share is what the pair expresses. Pairs trading between Consumer Sentiment (Michigan) and Real Personal Consumption is common because the spread is more stationary than either individual price, suitable for mean-reversion strategies.
Factor tilts expressed through the Consumer Sentiment (Michigan)-Real Personal Consumption selection allow managers to adjust style exposure without changing their overall asset allocation. Liquidity differences between Consumer Sentiment (Michigan) and Real Personal Consumption produce asymmetric spread moves during risk-off episodes.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between Consumer Sentiment (Michigan) and Real Personal Consumption?+
Consumer Sentiment (Michigan) and Real Personal Consumption are connected through shared asset class exposure with different factor tilts. When the underlying asset class shifts, both respond, though with different sensitivities and at different speeds. The spread between Consumer Sentiment (Michigan) and Real Personal Consumption captures the specific macro signal that flows through this relationship.
When does Consumer Sentiment (Michigan) typically lead Real Personal Consumption?+
Consumer Sentiment (Michigan) tends to lead Real Personal Consumption during rotation episodes between the two factor exposures. In those periods, moves in Consumer Sentiment (Michigan) precede corresponding moves in Real Personal Consumption by days to weeks, depending on the transmission channel and the depth of each market.
How are Consumer Sentiment (Michigan) and Real Personal Consumption historically correlated?+
Long-run correlation between Consumer Sentiment (Michigan) and Real Personal Consumption varies by regime. Peers in the same asset class are highly correlated in direction, with the spread reflecting factor tilts and rotation dynamics. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the Consumer Sentiment (Michigan)-Real Personal Consumption relationship.
What macro conditions drive divergence between Consumer Sentiment (Michigan) and Real Personal Consumption?+
Divergence between Consumer Sentiment (Michigan) and Real Personal Consumption typically arises from index reconstitution, mega-cap earnings surprises, or liquidity differences between the peers. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in Consumer Sentiment (Michigan) or Real Personal Consumption.
Is Consumer Sentiment (Michigan) a hedge for Real Personal Consumption?+
Peers like Consumer Sentiment (Michigan) and Real Personal Consumption do not hedge each other; both rise or fall with the shared asset class, and using the pair as a spread trade is different from using it as a hedge. Effective hedging requires matching the hedge to the specific risk being protected, and the Consumer Sentiment (Michigan)-Real Personal Consumption pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.