Global| Dec 23 2009Michigan Consumer Sentiment Increases Smartly
by:Tom Moeller
|in:Economy in Brief
Summary
Though the December Reuters/University of Michigan Index of Consumer Sentiment slipped from mid-month, is 7.6% increase to 72.5 recovered most of the declines during the prior two months. The latest figure fell short of Consensus [...]
Though the
December Reuters/University of Michigan Index of Consumer Sentiment
slipped from mid-month, is 7.6% increase to 72.5 recovered most of the
declines during the prior two months. The latest figure fell short of
Consensus expectations for a level of 73.8. Nevertheless, sentiment was
up sharply from its low last Fall. During the last ten years there has
been a two-thirds correlation between the level of sentiment and the
three-month change real consumer spending.
Sentiment about current economic conditions jumped 13.4% from November to the highest level since March of last year. Assessments of current financial conditions improved to the highest since September of last year. Buying conditions for large household goods, including furniture, refrigerators, stoves & televisions, also moved up by 12.3% to the highest level since January 2008.
The
full-month December reading on expected economic conditions recovered
its November decline with a 3.6% increase to the highest level since
September. The outlook for business conditions during the next twelve
months improved sharply and recovered most of November's decline but
the expected business conditions during the next five years fell and
expected personal finances advanced just modestly. All three of these
readings recently have been flat after sharp improvement early this
year.
Expected
price inflation during the next year was roughly steady
m/m at 3.0% but it was up from last December's reading of
1.7%. Respondents' view of government policy, which may
eventually influence economic expectations, fell sharply m/m to the
lowest level since February. Sixteen percent of respondent thought that
a good job was being done by government versus 39% who thought a poor
job was being done.
The Reuters/University of Michigan survey data are not seasonally adjusted. The reading is based on telephone interviews with about 500 households at month-end. These mid-month results are based on about 320 interviews. The summary indexes are in Haver's USECON database with details in the proprietary UMSCA database.
Inflation Expectations and the Risk of Deflation from the Federal Reserve Bank of San Francisco is available here.
| University of Michigan | December | Mid-December | November | October | Dec y/y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|---|
| Consumer Sentiment | 72.5 | 73.4 | 67.4 | 70.6 | 20.6% | 66.3 | 63.8 | 85.6 |
| Current Conditions | 78.0 | 79.1 | 68.8 | 73.7 | 12.2 | 69.6 | 73.7 | 101.2 |
| Expectations | 68.9 | 69.7 | 66.5 | 68.6 | 27.6 | 64.1 | 57.3 | 75.6 |
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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