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Economy in Brief

U.S. Consumer Sentiment Faded Further
by Tom Moeller April 1, 2005

The University of Michigan's March reading of consumer sentiment at 92.6 about matched Consensus expectations, ended the month down from the preliminary indication of 92.9 and was 1.6% lower than February.

Sentiment has fallen in each of the last three months and is off 10.8% from the January '04 peak. During the last ten years there has been a 75% (inverse) correlation between the level of consumer sentiment and the unemployment rate.

The reading of current conditions fell for the second month. The 1.1% decline reflected a sharp decline in sentiment regarding current conditions for buying vehicles.

Consumer expectations slipped for the third consecutive month due to a drop in expected business conditions in six months. This reading is down 27.3% from the January '04 high.

The University of Michigan survey is not seasonally adjusted.The mid-month survey is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.

University of Michigan Mar Feb Y/Y 2004 2003 2002
Consumer Sentiment 92.6 94.1 -3.3% 95.2 87.6 89.6
   Current Conditions 108.0 109.2 1.1% 105.6 97.2 97.5
   Consumer Expectations 82.8 84.4 -6.8% 88.5 81.4 84.6
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