Global| Jun 11 2010U.S. Consumer Sentiment Gains Upward Momentum
by:Tom Moeller
|in:Economy in Brief
Summary
The University of Michigan indicated that its mid-June measure of consumer sentiment added to earlier gains and rose to 75.5, its highest level since January 2008. Since its low late in 2008 the measure has risen by more than one- [...]
The University of Michigan
indicated that its mid-June measure of consumer sentiment added to
earlier gains and rose to 75.5, its highest level since January 2008.
Since its low late in 2008 the measure has risen by more than
one-third. During the last ten years there has been an 89% correlation
between the level of sentiment and the y/y change in real consumer
spending.
The index of expected economic conditions led last month's advance with a 2.8% increase to 70.7. The index was up 43.7% from the 2008 low. The readings for the expected change in personal finances (-3.3% y/y) and expected five-year business conditions (1.2% y/y) both improved. Expectations for business conditions during the next year slipped (+14.5% y/y).
Sentiment about current economic conditions also improved to the highest level since early-2008 and it was up 44.2% from the 2008 low. The assessment of current personal finances continued its steady improvement and buying conditions for large household goods, including furniture, refrigerators, stoves & televisions, rose back to its highest level since early-2008 (12.4% y/y).
Expected price inflation during the next year fell sharply m/m to 3.1% but remained up from the December 2008 reading of 1.7%. Respondents' view of government policy, which may eventually influence economic expectations, rose m/m to its highest level since January but remained down sharply from its high last May. Sixteen percent of respondents thought that a good job was being done by government versus 36% 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 results are based on about 320 interviews. The summary indexes are in Haver's USECON database with details in the proprietary UMSCA database.
The "Inflation" in Inflation Targeting from the Federal Reserve Bank of San Francisco is available here.
| University of Michigan | Mid-June | May | April | Juney/y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Consumer Sentiment | 75.5 | 73.6 | 72.2 | 6.6% | 66.3 | 63.8 | 85.6 |
| Current Conditions | 82.9 | 81.0 | 81.0 | 13.3 | 69.6 | 73.7 | 101.2 |
| Expectations | 70.7 | 68.8 | 66.5 | 2.2 | 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.
