Global| Dec 07 2007Michigan Consumer Sentiment Down Hard
by:Tom Moeller
|in:Economy in Brief
Summary
The University of Michigan's consumer sentiment index for early this month slid 2.1% to 74.5 from an upwardly revised November level. It was the third consecutive monthly decline and for the fourth quarter sentiment looks to have [...]
The University of Michigan's consumer sentiment index for early this month slid 2.1% to 74.5 from an upwardly revised November level. It was the third consecutive monthly decline and for the fourth quarter sentiment looks to have dropped 10% from the 3Q average.
The current conditions index stabilized a bit and rose 0.7% after a hefty 6.3% November decline. Conversely, the expectations index continued the prior two month's rate of decline and fell 4.5% m/m to 63.2, the lowest reading since 2005.
Current buying conditions for large household goods improved modestly m/m but remained down 13.0% from last December. The view of current personal finances, however, slid 3.0% for the second sharp monthly decline (-17.6% y/y).
Expectations for personal finances fell 3.5%, repeating a November drop (-10.5% y/y) and expectations for business conditions during the next year fell 11.0% (-38.1% y/y). Expectations for business conditions during the next five years, however, remained stable with the November level which was still depressed by nearly one quarter from a year ago.
The rise in gasoline prices has raised expectations for inflation during the next twelve months to 4.5% from 4.3% in November and from 3.5% one year ago. For the next five to ten years expectations were for a 3.6% rise in prices.
Opinions about government policy fell sharply. The 7.3% m/m decline brought this opinion measure down 14.6% from one year ago.
The University of Michigan survey is not seasonally adjusted.The reading is based on telephone interviews with about 500 households at month-end; the mid-month results are based on about 300 interviews. The summary indexes are in Haver's USECON database, with details in the proprietary UMSCA database.
Consumer sentiment, the economy, and the news media is a 2004 paper from the Federal Reserve Bank of San Francisco and it can be found here.
| University of Michigan | Dec (Prelim | Nov | Nov y/y | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|---|
| Consumer Sentiment | 74.5 | 76.1 | -18.8% | 87.3 | 88.5 | 95.2 |
| Current Conditions | 92.1 | 91.5 | -14.8% | 105.1 | 105.9 | 105.6 |
| Expectations | 63.2 | 66.2 | -22.2% | 75.9 | 77.4 | 88.5 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
