Global| Apr 13 2006U.S. Consumer Sentiment Inched Higher
by:Tom Moeller
|in:Economy in Brief
Summary
Consumer sentiment inched 0.3% higher early in April on the heels of the moderate 2.5% improvement during March. The University of Michigan's Sentiment Index rose to 89.2 and about matched Consensus expectations. During the last ten [...]
Consumer sentiment inched 0.3% higher early in April on the heels of the moderate 2.5% improvement during March. The University of Michigan's Sentiment Index rose to 89.2 and about matched Consensus expectations.
During the last ten years there has been a 76% correlation between the level of consumer sentiment and the y/y change in real consumer spending.
The current conditions index rose 1.8% after 3.3% during March. The index of personal finances added 1.7% (6.2% y/y) to the 5.4% improvement during March and the reading of buying conditions for large household goods rose 1.8% (6.3% y/y) following a similar increase the month prior. Consumers' assessment of gov't economic policy improved sharply (-1.1% y/y) and reversed the m/m declines of the prior two months.
Consumer expectations slipped for the third month this year due to a worsened short (-4.2% y/y) and long (-8.8% y/y) term outlook for business conditions. The expected change in personal finances improved for the third consecutive month (+3.3% y/y).
The mean expected inflation rate for the next twelve months was stable m/m at 3.8% and remained down from the 5.5% expected in October & September. For the next 5-10 years an inflation rate of 3.4% is expected.
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.
| University of Michigan | April | March | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Consumer Sentiment | 89.2 | 88.9 | 1.7% | 88.6 | 95.2 | 87.6 |
| Current Conditions | 111.1 | 109.1 | 6.4% | 105.9 | 105.6 | 97.2 |
| Expectations | 75.1 | 76.0 | -2.5% | 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.
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