Global| Apr 11 2008Michigan Consumer Sentiment Down Yet Again
by:Tom Moeller
|in:Economy in Brief
Summary
The preliminary reading of April consumer sentiment from the University of Michigan fell another 9.1% m/m to 63.2. Consensus expectations had been for a lesser decline to 69.0. The decline dropped sentiment to near its lowest level [...]
The preliminary reading of April consumer sentiment from the University of Michigan fell another 9.1% m/m to 63.2. Consensus expectations had been for a lesser decline to 69.0. The decline dropped sentiment to near its lowest level since 1982.
The expectations component accounted for the largest part of the decline in April sentiment with an 11.1% m/m drop. The index is at its lowest since 1990. Expectations for personal finances fell out of bed with a 13.4% m/m drop (-23.6% y/y). Expectations for business conditions during the next year also fell a hard 8.7% (-51.7% y/y). Expectations for conditions over the next five years fell 11.1% m/m (-20.0% y/y).
Opinions about government policy, which apparently influence economic expectations, fell 4.4% m/m (-28.6% y/y). The percentage of those surveyed who indicated that they thought government was doing a good job fell to the lowest level since 1992 and 43% had a poor opinion.
The mean expectation for inflation during the next twelve months rose again last month to 5.6%, nearly the highest level since 1990.
The current conditions index fell 6.9% m/m after a slight rise during March. The view of current conditions for buying large household goods fell hard (-24.3% y/y) and the view of current personal finances also fell sharply (-26.9% y/y).
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.
The Consequences of Mortgage Credit Expansion: Evidence from the 2007 Mortgage Default Crisis from Atif R. Mian and Amir Sufi at the University of Chicago can be found here.
| University of Michigan | April (Prelim.) | March | Feb | April y/y | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|---|---|
| Consumer Sentiment | 63.2 | 69.5 | 70.8 | -27.4% | 85.6 | 87.3 | 88.5 |
| Current Conditions | 78.4 | 84.2 | 83.8 | -25.0% | 101.2 | 105.1 | 105.9 |
| Expectations | 53.4 | 60.1 | 62.4 | -29.6% | 75.6 | 75.9 | 77.4 |
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.
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