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Economy in Brief

U.S. Consumer Sentiment Slumps
by Tom Moeller  March 25, 2011

Consumers are reeling from the rise in oil prices. The March reading of consumer sentiment, from the University of Michigan, declined 12.9% to 67.5 from 77.5 in February. It was the lowest figure since October. A reading of 68.0 had been expected. During the last ten years there has been an 83% correlation between the level of sentiment and the y/y change in real consumer spending.

The expectations component of consumer sentiment fell the sharpest with a 19.1% m/m decline to 57.9, the lowest level in exactly two years. The reading of current economic conditions fell a lesser 5.1% to 82.5 (+0.1% y/y).

The Reuters/University of Michigan survey data are not seasonally adjusted. The readings are based on telephone interviews with just over 300 households during early-to-mid November. The summary indexes are in Haver's USECON database with details in the proprietary UMSCA database. The expectations figure is in Haver's AS1REPNA database.

University of Michigan (Q1'66 = 100) Mar Feb Jan Mar Y/Y 2010 2009 2008
Consumer Sentiment 67.5 77.5 74.2 -8.3% 71.8 66.3 63.8
 Current Economic Conditions 82.5 86.9 81.8 0.1 81.0 69.6 73.7
 Expectations 57.9 71.6 69.3 -14.7 65.9 64.1 57.3
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