Global| Aug 13 2010U.S. Consumer Sentiment Improves Just Slightly This Month
by:Tom Moeller
|in:Economy in Brief
Summary
Consumers recovered slightly this month from their gloomy state during July, but not by much. The mid-month August reading of consumer sentiment, as measured by the University of Michigan, recovered a quarter of the July drop with an [...]
Consumers recovered slightly this month from their gloomy state during July, but not by much. The mid-month August reading of consumer sentiment, as measured by the University of Michigan, recovered a quarter of the July drop with an increase to 69.6. The latest was the lowest reading since November but up still by one-quarter from the 2008 low. 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 expectations index improved m/m to 64.1. The readings for expected business conditions during the next year rose (0.0% y/y) and expectations for business conditions during the next five years (2.5% y/y) recovered most of their July decline. Expectations for personal finances fell further to the lowest since early-2009 (-5.4% y/y).
Expected price inflation during the next year ticked up slightly to 3.4% and remained up from the December 2008 low of 1.7%. Respondents' view of government policy, which may eventually influence economic expectations, improved sharply to their highest since November. An increased nineteen percent of respondents thought that a good job was being done by government while a lessened 36% who thought a poor job was being done.
Sentiment about current economic conditions also improved slightly but remained near the lowest level this year. The assessment of current personal finances rose sharply (37.9% y/y) but perceived buying conditions for large household goods, including furniture, refrigerators, stoves & televisions held roughly steady m/m (8.0% y/y).
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. The summary indexes are in Haver's USECON database with details in the proprietary UMSCA database.
Consumer sentiment, the economy, and the news media. This 2004 article is from the Federal Reserve Board of Governors can be found here here.
| University of Michigan | Mid-August | July | June | August Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Consumer Sentiment | 69.6 | 67.8 | 76.0 | 5.9% | 66.3 | 63.8 | 85.6 |
| Current Economic Conditions | 78.3 | 76.5 | 85.6 | 17.6 | 69.6 | 73.7 | 101.2 |
| Expectations | 64.1 | 62.3 | 69.8 | -1.4 | 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.
More Economy in Brief
