Global| Oct 16 2009Michigan Consumer Sentiment Sags M/M But Remains Improved From Its Low
by:Tom Moeller
|in:Economy in Brief
Summary
Consumer sentiment sagged this month but retraced just half of the rise during September. The University of Michigan's mid-month October reading of consumer sentiment fell to 69.4 from a September reading of 73.5. Despite the decline [...]
Consumer
sentiment sagged this month but retraced just half of the rise during
September. The University of Michigan's mid-month October reading of
consumer sentiment fell to 69.4 from a September reading of 73.5.
Despite the decline sentiment remained up by roughly one-quarter from
the low last Fall. Consensus expectations had been for no change this
month versus September. During the last ten years, there has been a 69%
correlation between the level of sentiment and the growth in real
consumer spending during the next five months.
The
latest decline was led by a sharp 18.7% drop in expected business
conditions during the next five years which reversed much of the recent
improvement. Expected conditions during the next year fell just
modestly and the index remained more than double the February low.
Conversely, the expected change in personal finances improved and the
index was up nearly one-quarter from the low during 2008 with the
higher stock market. The reading of current economic condition fell
just moderately as the reading of personal finances slipped m/m. It has
remained range-bound this year with higher unemployment. The reading of
buying conditions for large household goods held steady m/m but it is
up by one-third from the November low due to low prices. Expected
price inflation during the next year amounted to 3.1%; up slightly from
September but down from a high of 7% during May of last year. A low of
0.3% inflation was expected by 25% of respondents but 5.0% inflation
was expected by another quarter. Inflation of 3.4% during the next 5-10
years was the mean expectation. The opinion of
government policy, which may eventually influence economic
expectations, fell slightly from September and remained near
the lowest level since February. 
Thirty percent of
respondents thought that a poor job was being done by government. A
reduced 19% thought that a good job was being done. It had hit 30% in
April.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.Optimism
Amid Uncertainty from the Federal Reserve Bank of Dallas is
available
here.
| University of Michigan | Mid-October | September | August | Oct y/y | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|---|
| Consumer Sentiment | 69.4 | 73.5 | 65.7 | 20.5% | 63.8 | 85.6 | 87.3 |
| Current Conditions | 72.1 | 73.4 | 66.6 | 23.5 | 73.7 | 101.2 | 105.1 |
| Expectations | 67.6 | 73.5 | 65.0 | 18.6 | 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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