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 3/16/07 For Mar 2007 | ||||||||||||
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Highlights
At 88.8 and down a sharp 2.5 percentage points, the University of Michigan's consumer sentiment index for early March indicates that spirits are easing in line with slowing economic growth. Despite higher gasoline prices, inflation expectations remain stable at 3.0 percent.
The 88.8 reading, if not revised in the final reading at month-end, would be the lowest since September. The expectations sub-index, an index specifically on the future outlook, fell to 79.3 in what would also be its lowest reading since September.
Bonds firmed in reaction to the report while the dollar was quiet. Today's data point to a step down for the Conference Board's index at month-end which in February showed the highest level of the expansion.
The University of Michigan's Consumer sentiment index fell to 91.3 in February from a January reading of 96.9. Inflation expectations were 3.0 percent, unchanged from the final January readings. The level for overall consumer sentiment is consistent with moderate economic growth, but a further decline would be of concern to the markets.
Consumer sentiment Consensus Forecast for preliminary March 07: 89.8
Range: 87.0 to 93.3
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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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