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 1/18/08 For Jan 2007 | ||||||||||||
| ||||||||||||
Highlights
Consumer sentiment made a surprise climb in the first half of January as the Reuters/University of Michigan index rose to 80.5 for a big 5 point gain from December. Interestingly, the assessment of current conditions rose more than 7 points to 98.1, defying the grim outlook coming from the Federal Reserve and the current run of economic data headed by weak retail sales. The assessment of future conditions also rose, up 69.1 vs. December's 65.6.
There was even good news on inflation, reinforcing Ben Bernanke's comments yesterday that inflation expectations remain anchored. One-year expectations were unchanged at 3.4 percent with 5-year expectations dipping 1 tenth to 3.0 percent.
Treasury yields rose but only briefly in reaction to the data while the dollar firmed. This report does not stress the job market as does the Conference Board's measure, but today's results do hint at improving demand for labor in line perhaps with the ongoing dip in jobless claims.
The Reuters/University of Michigan's consumer sentiment index rose in December, up 1 point to a still mild 75.5. With recent increases in oil prices and declines in the stock market, we may see some slippage in consumer confidence. With the Fed worried still about inflation despite recession concerns - at least based on Fedspeak - the Fed and markets should still be paying attention to the inflation expectations numbers. Inflation expectations eased back 1 tenth for the one-year outlook to 3.4 percent. Five-year expectations are at 3.1 percent, up 2 tenths compared with November. Fed officials continue to emphasize the importance of inflation expectations remaining anchored and these data are key indicators on whether inflation expectations are not rising.
Consumer sentiment index Consensus Forecast for preliminary January 08: 74.7
Range: 70.0 to 75.5
![[Chart]](chart.gif)
|
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.) |
| 2008 Release Schedule | ||||||||||||||||||||||||||
|
powered by
![[Econoday]](../../../../../../../../../images/logo.gif){kind=logo}