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Economy in Brief

U.S. Consumer Sentiment Faded Late Month
by Tom Moeller November 24, 2004

Though the November reading of Consumer Sentiment from the University of Michigan rose to 92.8, that was lower than the mid-month reading of 95.5 and indicated that Sentiment faded as the month progressed. Consensus expectations for a reading of 96.0 were disappointed.

During the last ten years there has been a 75% correlation between the level of consumer sentiment and the y/y change in real PCE.

The consumer expectations index rose 1.7% m/m (-3.3% y/y) and the current economic conditions index rose 0.7% (2.1% y/y), both off from the mid-month pace

Consumer sentiment amongst families earning more than $50,000 per year rose m/m but was down 2.0% y/y. Sentiment amongst families earning less than $50,000 per year fell m/m and fell 1.3% y/y.

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.

"Consumer Sentiment and the Media" from the Federal Reserve Bank of San Francisco can be found here.

University of Michigan Nov Oct Y/Y 2003 2002 2001
Consumer Sentiment 92.8 91.7 -1.0% 87.6 89.6 89.2
   Current Conditions 104.7 104.0 2.1% 97.2 97.5 100.1
   Consumer Expectations 85.2 83.8 -3.3% 81.4 84.6 82.3
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