Global| Jul 14 2006U.S. Consumer Sentiment Sagged
by:Tom Moeller
|in:Economy in Brief
Summary
Consumer sentiment early this month reversed part of its June improvement and sagged 2.2% to 83.0, according to the University of Michigan. The decline ran counter to Consensus expectations for a modest increase to 85.5. During the [...]
Consumer sentiment early this month reversed part of its June improvement and sagged 2.2% to 83.0, according to the University of Michigan. The decline ran counter to Consensus expectations for a modest increase to 85.5.
During the last ten years there has been a 77% correlation between the level of consumer sentiment and the y/y change in real consumer spending.
The reading of current economic conditions reversed about half of the June increase with a 4.0% decline. The index of current personal finances reversed nearly all of the prior month's rise with an 8.0% (-14.8% y/y) decline though buying conditions for large household goods fell a modest 1.3% (-8.7% y/y).
Expectations for the economy fell a modest 0.6% but it was the fifth decline his year. It was led by a 5.7% (-25.9% y/y) decline in 12 month expected business conditions although 5 year expected conditions improved modestly, the first gain in four months, as did expected personal finances.
Consumers' opinion about gov't economic policy recovered 5.4% m/m (-15.2% y/y), the first monthly increase since March while expected inflation during the next year fell sharply to 3.7%, its lowest since February. The five to ten year expected rate of inflation also fell to 3.2%, its lowest in over a year.
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 | July (Prelim.) | June | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Consumer Sentiment | 83.0 | 84.9 | -14.0% | 88.6 | 95.2 | 87.6 |
| Current Conditions | 100.8 | 105.0 | -11.2% | 105.9 | 105.6 | 97.2 |
| Expectations | 71.6 | 72.0 | -16.3% | 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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