Global| Apr 17 2009Michigan Consumer Sentiment Improves Again
by:Tom Moeller
|in:Economy in Brief
Summary
Despite higher unemployment, the University of Michigan indicated that its mid-April reading of consumer sentiment rose for a second consecutive month. In fact, the index level of 61.9 was its highest since September of last year. The [...]
Despite higher unemployment, the University of Michigan indicated that its mid-April reading of consumer sentiment rose for a second consecutive month. In fact, the index level of 61.9 was its highest since September of last year. The improvement, however, has been just creeping. The rise from last year's low leaves it still down 20.7% from early 2008 and down by 36.1% from early 2007.
The expectations component of consumer sentiment showed the largest improvement this month with a 10.1% rise on top of the 5.9% March improvement. Expectations for business conditions during the next five years moved up by 19.0% m/m to the highest level since September (+5.6% y/y). Expected conditions during the next year rose a lesser 9.1% though the reading was a sharply from that of last spring. Finally, the higher stock market lifted the expected change in personal finances. The reading made up declines early this year with a 7.7% increase.
The current economic conditions index made up the declines of the prior two months with a 5.2% rise. Buying conditions for large household goods recouped the declines of earlier this year while the view of current personal finances remained unchanged m/m, down by one-half from early 2007.
The opinion of government policy, which may eventually influence economic expectations, slipped m/m but remained near the highest level since January of 2007. Twenty percent of respondents thought that a good job was being done by government, up from the four percent low of last December, while a much reduced thirty percent thought that a poor job was being done.
Probably reflecting the recent rise in oil prices, inflation expectations for the next year rose to 3.4% though they were as high as 7.0% last May. The median expected increase rose to 3.0% from 2.0%. The range of expectations is from slight price deflation to a 5.2% increase in prices. The expected inflation rate during the next five years reversed slipped to 2.8%.
The University of Michigan survey data 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.
| University of Michigan | Mid-April | March | February | April y/y | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|---|
| Consumer Sentiment | 61.9 | 57.3 | 56.3 | -1.1% | 63.8 | 85.6 | 87.3 |
| Current Conditions | 66.6 | 63.3 | 65.5 | -13.5 | 73.7 | 101.2 | 105.1 |
| Expectations | 58.9 | 53.5 | 50.5 | 10.5 | 57.3 | 75.6 | 75.9 |
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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