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Economy in Brief

U.S. Consumer Sentiment Backpedals
by Tom Moeller  March 15, 2013

The University of Michigan's Index of Consumer Sentiment in mid-March retreated to 71.8 (-5.8% y/y) from 77.6 in February. The latest was the lowest level since December 2011. The figure remained down versus the November high of 82.7 and compared to Consensus expectations for an uptick to 78.0. During the last ten years, there has been a 61% correlation between the level of sentiment and the three-month change in real personal consumption expenditures. Last month's sentiment figure reflected a much lower index of consumer expectations at 61.7 (-11.6% y/y). The present situations reading fell to 87.5 (+1.7% y/y).

The Reuters/University of Michigan survey data are not seasonally adjusted. The readings are based on telephone interviews with over 300 households. Data can be found in Haver's USECON database. The expectations figure is from Action Economics and can be found in Haver's AS1REPNA database.

The Political Economy of Balanced Budget Amendments from the Federal Reserve Bank of Philadelphia is available here.

University of Michigan (Q1'66 = 100)  Mid-Mar Feb Jan Mar '12 2012 2011 2010
Consumer Sentiment 71.8 77.6  73.8 76.2 76.5 67.3 71.8
 Current Economic Conditions 87.5 89.0 85.0 86.0 85.6 79.1 80.9
 Consumer Expectations 61.7 70.2 66.6 69.8 70.7 59.8 66.0
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