Global| Jan 29 2010Michigan Consumer Sentiment Highest in Two Years
by:Tom Moeller
|in:Economy in Brief
Summary
Building on gains earlier in the month consumer sentiment for all of January rose to its highest level since January of 2008. The Reuters/University of Michigan Index of Consumer Sentiment for all of January rose to 74.4 from 72.5 in [...]
Building on gains earlier in the month consumer sentiment for
all of January rose to its highest level since January of 2008. The
Reuters/University of Michigan Index of Consumer Sentiment for all of
January rose to 74.4 from 72.5 in December. The latest figure beat
Consensus expectations for a reading of 73.0 and it was up sharply from
the low of 55.3 in November 2008.
During the last ten years there has
been a two-thirds correlation between the level of sentiment and the
three-month change real consumer spending.
Sentiment about current economic conditions increased another
4.0% after its 13.4% jump from November. The latest was the highest
level since March of 2008. Assessments of current financial conditions
improved m/m to the highest since September of 2008. 
Buying conditions
for large household goods, including furniture, refrigerators, stoves
& televisions, also moved up 3.9% to the highest level since
January 2008.
The January reading on expected economic conditions increased
sharply from mid-month. The 1.7% m/m increase pulled the index to its
highest level since September. Expectations for business conditions
during the next year improved and have more-than doubled since last
February.
Expectations for business conditions during the next five
years also improved m/m and rose sharply from the 2008 low.
Expectations for personal finances slipped m/m to the lowest since
March 2009 as expectations for family income growth remained
moderate-to-lower.
Expected price inflation during the next year rose m/m to 3.4% and it was up from the December 2008 reading of 1.7%.Respondents' view of government policy, which may eventually influence economic expectations, improved following the sharp December decline. Just fourteen percent of respondents thought that a good job was being done by government versus 33% who thought a poor job was being done.
| University of Michigan | January | Mid-January | December | November | Jan y/y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|---|
| Consumer Sentiment | 74.4 | 72.8 | 72.5 | 67.4 | 21.6% | 66.3 | 63.8 | 85.6 |
| Current Conditions | 81.1 | 81.0 | 78.0 | 68.8 | 22.0 | 69.6 | 73.7 | 101.2 |
| Expectations | 70.1 | 67.5 | 68.9 | 66.5 | 21.3 | 64.1 | 57.3 | 75.6 |
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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