Global| Mar 31 2006U.S. Consumer Sentiment Recovered Late in March
by:Tom Moeller
|in:Economy in Brief
Summary
During late March, consumer sentiment recovered enough to lift the University of Michigan's Sentiment Index for the month to 88.9 from a preliminary indication of 86.7. Consensus expectations had been for a reading of 87.0. During the [...]
During late March, consumer sentiment recovered enough to lift the University of Michigan's Sentiment Index for the month to 88.9 from a preliminary indication of 86.7. Consensus expectations had been for a reading of 87.0.
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.
The current conditions index for the month improved 3.3% after a 4.3% decline during February. The index of personal finances recovered all of the prior month's drop with a 5.4% (+0.9% y/y) gain and the reading of buying conditions for large household goods rose 1.9% (1.2% y/y). Consumers' assessment of gov't economic policy improved late in the month enough to recover a piece of the sharp decline during February.
Consumer expectations rose 2.0% from February due to the late month improvement. The near term economic outlook still fell m/m but the long term outlook improved dramatically.
The mean expected inflation rate for the next twelve months rose m/m to 3.8%, still down from the 5.5% expected in October & September.
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.
Variations in consumer sentiment across demographic groups from the Federal Reserve Bank of Chicago is available here.
| University of Michigan | March | March (p) | Feb | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|---|
| Consumer Sentiment | 88.9 | 86.7 | 86.7 | -4.0% | 88.6 | 95.2 | 87.6 |
| Current Conditions | 109.1 | 106.2 | 105.6 | 1.0% | 105.9 | 105.6 | 97.2 |
| Expectations | 76.0 | 74.2 | 74.5 | -8.2% | 77.4 | 88.5 | 81.4 |
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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