| Consumer Sentiment |
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Released On 11/11/2011 9:55:00 AM For Nov(p), 2011
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Prior | Consensus | Consensus Range | Actual |
| Sentiment Index - Level | 60.9 | 61.5 | 58.5 to 68.0 | 64.2 |
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Highlights
Consumer sentiment is holding on to its strong gains in the last half of October, coming in at 64.2 for the mid-month November reading. This compares with an implied 64.3 reading in the last half of last month and a 60.9 reading for all of October. Gains are centered in the most important component which is the leading component of expectations which, compared to all of October, is up more than four points at 56.2. The coincident component of current conditions is at 76.6 vs 75.1 for all of October.
Inflation readings are stable with one-year expectations unchanged at 3.2 percent. Five-year expectations are down one tenth to 2.6 percent.
Consumer spirits have been unusually depressed and have stood in contrast to strength in consumer spending. If gains for confidence can be extended in the weeks ahead, the economic outlook as well as expectations for holiday shopping will improve. The stock market is adding to its strong opening gains in early reaction to this report.
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Market Consensus before announcement
The Reuter's/University of Michigan's consumer sentiment index jumped to 60.9 for final October, a reading that compared with a very weak 57.5 at mid-month to imply a 64.3 level for the final two weeks of the month. The 64.3 implied reading puts the last two weeks of this month on a par with July which was of course just before the shocks of August threw sentiment to 30 year lows. The latest improvement was centered in the leading component of expectations which jumped 4.8 points to 51.8. The current conditions component also rose, up 1.3 points to 75.1.
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Definition
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. Preliminary estimates for a month are released at mid-month. Final estimates for a month are released near the end of the month.
Why Investors Care
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![[Chart]](showimage.asp?imageid=21641)
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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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