Global| Dec 23 2005U.S. Consumer Sentiment Again Stronger Than Expected
by:Tom Moeller
|in:Economy in Brief
Summary
Consumer sentiment late in December added to gains earlier in the month, reported the University of Michigan. At 91.5 for the month as a whole, sentiment rose 12.1% from November which had risen 10.0% from October and beat Consensus [...]
Consumer sentiment late in December added to gains earlier in the month, reported the University of Michigan. At 91.5 for the month as a whole, sentiment rose 12.1% from November which had risen 10.0% from October and beat Consensus expectations for an increase to 89.0.
During the last ten years there has been a 76% correlation between the level of consumer sentiment and the y/y change in real consumer spending.
Consumers' expectations rose 15.2% on top of a 10.1% November gain to the highest level since July. Expected business conditions during the next year surged again and the index has improved more than two thirds since September. Expectations for personal finances also jumped. Adding to a small improvement the gains halted declines during the Summer.
The mean expected inflation rate for the next twelve months held steady m/m at 4.1% and was below the 5.5% expected in October & September.
The current conditions index rose 8.9% following a similar gain in November. The reading of personal finances surged 15.5% (6.3% y/y) and the reading of buying conditions for large household goods jumped for the second straight month (-0.6% y/y).Decline's in consumers' reading of gov't economic policy (-20.0% y/y) have stabilized during the last two months.
The University of Michigan survey is not seasonally adjusted.The mid-month survey is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.
| University of Michigan | Dec | Dec (Prelim.) | Nov | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|---|
| Consumer Sentiment | 91.5 | 88.7 | 81.6 | -5.8% | 95.2 | 87.6 | 89.6 |
| Current Conditions | 109.1 | 106.6 | 100.2 | 2.2% | 105.6 | 97.2 | 97.5 |
| Expectations | 80.2 | 77.3 | 69.6 | -11.8% | 88.5 | 81.4 | 84.6 |
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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