Global| Jun 16 2006U.S. Consumers Felt a Little Better in Early June
by:Tom Moeller
|in:Economy in Brief
Summary
Consumer sentiment early this month improved according to the University of Michigan. The preliminary June index rose to 82.4 from a low 79.1 during May but recovered less than half of that month's decline. Consensus expectations had [...]
Consumer sentiment early this month improved according to the University of Michigan. The preliminary June index rose to 82.4 from a low 79.1 during May but recovered less than half of that month's decline. Consensus expectations had been for a further slide to 78.5.
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 recovered more than half of the May decline with a 7.3% increase as the index of current personal finances rose 9.8% (-8.2% y/y). The reading of buying conditions for large household goods also recouped half of the May decline with a 5.4% (-9.9% y/y) increase.
Expectations for the economy improved a modest 1.5% after the 7.1% slide during May, bolstered by slightly improved expectations for personal finances and buying conditions during the next year. But long term (5 year) expectations for buying conditions fell a sharp 7.5% (-28.2% y/y) as consumers' opinion about gov't economic policy cratered another 6.5% m/m (-22.6% y/y) to the lowest level since 1993.
Expected inflation during the next year slipped modestly to 4.6% but the five to ten year expected rate of inflation rose to 3.8%, near the nine year high.
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.
Why Are Yield Curves So Flat and Long Rates So Low Globally? is a speech by Fed Governor Randall S. Kroszner and can be found here.
The latest Beige Book covering regional economic conditions from the Federal Reserve Board can be found at this link.
| University of Michigan | June (Prelim. | May | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Consumer Sentiment | 82.4 | 79.1 | -14.2% | 88.6 | 95.2 | 87.6 |
| Current Conditions | 103.1 | 96.1 | -8.9% | 105.9 | 105.6 | 97.2 |
| Expectations | 69.2 | 68.2 | -18.6% | 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.
More Economy in Brief
