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Economy in Brief

Michigan Consumer Sentiment Improves Slightly
by Tom Moeller May 14,2010

The University of Michigan reported that its mid-May reading of consumer sentiment rose slightly to 73.3 from 72.2 during all of April. The figure roughly reversed the modest April decline and was as expected. Despite this unimpressive performance, the reading was up by one-third from its 2008 low.

The index of expected economic conditions improved m/m to 68.3. Here again, the figure has moved sideways of late but is 38.8% above the 2008 low. The readings for expected change in personal finances (-4.4% y/y), business conditions during the next twelve months (12.0% y/y) and expected five-year business conditions (-9.1% y/y) each recently have been flat-to-lower.

Sentiment about current economic conditions moved sideways. It remained up 19.8% from last year and up 41.1% from the 2008 low. The assessment of current personal finances nudged higher m/m (31.1% y/y) but buying conditions for large household goods, including furniture, refrigerators, stoves & televisions fell (+14.2% y/y).

Expected price inflation during the next year increased to 4.0% and was up from the December 2008 reading of 1.7%.Respondents' view of government policy, which may eventually influence economic expectations, was stable m/m but down roughly one-third from its high last May. Twelve percent of respondents thought that a good job was being done by government versus 38% who thought a poor job was being done, near the twelve-month high.

University of Michigan Mid-May April March May y/y 2009 2008 2007
Consumer Sentiment 73.3 72.2 73.6 6.7% 66.3 63.8 85.6
  Current Conditions 81.1 81.0 82.4 19.8 69.6 73.7 101.2
  Expectations 68.3 66.5 67.9 -1.6 64.1 57.3 75.6
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