Consumer Sentiment

Consumer spending is roughly 70% of the US economy, so how households feel about their finances is a leading indicator of where spending is heading. Sentiment tops have often preceded recessions; sentiment troughs have often preceded recoveries. Especially useful for consumer-facing sectors — retail, restaurants, housing, autos — where near-term revenue depends directly on household willingness to spend. When sentiment diverges from actual spending data, it's worth asking which number is about to catch up to the other.