Global| Jun 25 2010U.S. Consumer Sentiment Revised Higher
by:Tom Moeller
|in:Economy in Brief
Summary
Consumer sentiment as reported by The University of Michigan improved even more this month than indicated by the mid-June measure. The final figure rose to 76.0, its highest level since January 2008. Since its low late in 2008 the [...]
Consumer sentiment as reported by The University of Michigan improved even
more this month than indicated by the mid-June measure. The final figure rose to
76.0, 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 1.5% increase to 69.8 and the index was up 41.9% from the 2008 low. The readings for the expected change in personal finances (-4.1% y/y) and expected five-year business conditions (-2.3% y/y) were revised lower. Expectations for business conditions during the next year were unrevised and slipped m/m (+14.5% y/y).
Sentiment about current economic conditions showed a stronger advance than initially estimated to the highest level since early-2008 and it was up roughly one-half from the 2008 low. The assessment of current personal finances continued its steady improvement (22.4% y/y) and buying conditions for large household goods, including furniture, refrigerators, stoves & televisions, rose back to its highest level since early-2008 (14.9% y/y).
Expected price inflation during the next year was revised up slightly to 3.3% but still 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. Seventeen percent of respondents thought that a good job was being done by government versus 38% 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.
| University of Michigan | June-Final | Mid-June | May | April | June Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|---|
| Consumer Sentiment | 76.0 | 75.5 | 73.6 | 72.2 | 7.3% | 66.3 | 63.8 | 85.6 |
| Current Conditions | 85.6 | 82.9 | 81.0 | 81.0 | 16.9 | 69.6 | 73.7 | 101.2 |
| Expectations | 69.8 | 70.7 | 68.8 | 66.5 | 0.9 | 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.
