Headlines from last week's disappointing jobs report aren't helping the consumer's assessment of current conditions which, at 80.6, fell 5.4 points in an unusually steep decline last seen in July last year during the government's deficit cliff hanger. This component of the consumer sentiment index offers a very early look at conditions so far this month, and together with increases in the last two weekly jobless claims reports, the early look at the month is disappointing.
The weakness in current conditions pulled down the composite index by five tenths to 75.7, putting at risk eight straight months of gains. Readings will have to pick up at month end in order to keep the streak alive.
The report's expectations component is a positive, up 2.7 points to 72.5 for its best reading of the recovery. This suggests that consumers believe the current disappointment will be short lived.
The gain in expectations likely reflects to a significant degree the easing underway in gas prices. A big positive in the report is a slip in one-year inflation expectations, down a big five tenths to 3.4 percent. Five-year expectations are unchanged at 3.0 percent.
But the market, at least in initial reaction, isn't reacting to the silver linings in this report but to the disappointing assessment of current conditions. The Dow, down 1/2 percent, is moving to morning lows.