The University of Michigan's Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending. Consumer confidence and consumer sentiment are two ways of talking about consumer attitudes. Among economic reports, consumer sentiment refers to the Michigan survey while consumer confidence refers to The Conference Board's survey. Why Investors Care
| Released on 4/27/07 For Apr 2007 | ||||||||
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Highlights
Reuters/University of Michigan consumer sentiment index, at 87.1 for April, rose 1.8 percentage points from mid-month but still fell short of March's reading of 88.4. Inflation expectations, closely watched by Federal Reserve officials, were 3.3 percent, unchanged from mid-month but up 3 tenths from March in a reflection of high gas prices.
Current conditions were firm at 104.6, up 1.1 percentage points from March and a contrast with the Conference Board's report earlier this week that showed a sharp drop. Expectations for the Reuters/Michigan report slipped to 75.9 from 78.7 in March.
Today's report offsets to a degree the greater weakness seen in the Conference Board's data. The outlook for consumer spending remains healthy, underscored by today's GDP report that showed a 3.8 percent annualized increase in personal consumption expenditures. Markets showed no significant reaction to the report.
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Consumer sentiment is mainly affected by inflation and employment conditions. However, consumers are also impacted by current events such as bear & bull markets, geopolitical events such as war and terrorist attacks. Investors monitor consumer sentiment because it tends to have an impact on consumer spending over the long run (although not necessarily on a monthly basis.) |
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