Consumers are expressing more confidence than any time in more than a decade in their current economic conditions, however overall, their sentiment fell.

The Index of Consumer Sentiment decreased in the beginning of July to 93.1, according to the Survey of Consumers conducted by the University of Michigan. This is down 2.1% from 95.1 in June but still up 3.4% from 90 last year.

But while the index is down overall, it’s two measures of consumer assessment continue to grow further apart.

“Confidence in future economic prospects continued to slide in early July, with the Expectations Index now 10.1 index points below its January 2017 peak,” Survey of Consumers Chief Economist Richard Curtin said. “In contrast, consumers' assessments of current economic conditions regained the March 2017 peak, the highest level since the July 2005 survey.”

An article by Jill Mislinski for Advisor Perspectives explains what this means historically:

The Michigan average since its inception is 85.4. During non-recessionary years the average is 87.6. The average during the five recessions is 69.3.

“Overall, the recent data follow the same pattern repeatedly recorded around past cyclical peaks: expectations start to post significant declines while assessments of current economic conditions continue to reach new peaks,” Curtin said. “To be sure, the data do not suggest an impending recession.”

“Rather, the data indicate that hopes for a prolonged period of 3% GDP growth sparked by Trump's victory have largely vanished, aside from a temporary snap back expected in the 2nd quarter,” he said. “The declines recorded are now consistent with just above 2% GDP growth in 2017.”

The index of Current Economic Conditions increased 0.6% from last month’s 112.5 to 113.2 in July. This represents an increase of 3.9% from 109 last year.

But this increase was offset by the decrease in the Index of Consumer Expectations, which dropped 4.4% from June’s 83.9 to 80.2 in July. It was still up 3.1% from 77.8 last year. And despite these declines, Curtin explained the drop is not due to an upcoming recession.

“Much steeper declines in expectations typically precede recessions,” Curtin said. “The weakness in the Expectations Index in early July was concentrated among Republicans, falling to 108.9 from June’s 116.0 and February’s 120.1.”

“Democrats continue to hold much less favorable expectations, although the Expectations Index among Democrats has markedly improved, to 63.2 from June’s 62.0 in June and 55.5 in February,” he said. “Overall, the data indicate an annual gain of 2.4% in personal consumption during 2017.”