Econoday Economic Report: Consumer Sentiment

2012 Economic Calendar

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Consumer Sentiment

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Released On 10/22/2012 9:55:00 AM For Oct, 2012

	Prior	Consensus	Consensus Range	Actual
Sentiment Index - Level	83.1	83.1	76.0 to 85.0	82.6

Highlights
Consumer sentiment has been steady the last two weeks, holding on to the bulk of gains posted in the first two weeks of the month. The final October reading, at 82.6, is down 5 tenths from mid-month and is well above September's 78.3. Both the current conditions and the expectations components slipped 5 tenths from mid-month, to 88.1 and 79.0. The 88.1 reading for current conditions is up a noticeable 2.4 points from September to hint at general growth for October's slate of economic data. The expectations index is up a sizable 5.5 points from September which hints at confidence in income prospects and is a positive for the holiday shopping outlook. A separate reading on the 12-month economic outlook is at 96, down 1 from mid-month but up 9 points from September.

Prices at the gas pump have been coming down this month while food prices are stable, reflected in inflation expectations which are at 3.1 percent for the 1-year outlook, down 2 tenths from September, and at 2.7 percent for the 5-year outlook for a 1 tenth dip. These readings show little change from mid-month.

A weak jobs market aside, the consumer is doing pretty well, judging by confidence measures such as today's report and by economic data such as this morning's GDP report. But today's sentiment report, due to softness relative to mid-month, isn't helping the Dow which is moving slightly lower. Watch on Tuesday for the consumer confidence from the Conference Board.

Market Consensus before announcement
The Reuter's/University of Michigan's consumer sentiment index posted an October mid-month reading of 83.1 which was up 4.8 points from September and was a very big move for this report. The gain was centered in the expectations component which jumped 6.0 points to 79.5 which is by far the best reading of the recovery. The sentiment report also included a sizable 2.9 point gain for the current conditions component, which at 88.6 retested its best level of the recovery which is August's 88.7.

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

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.)

2012 Released Schedule

Released On: 1/9 1/23 2/6 2/20 3/12 3/26 4/9 4/23 5/7 5/21 6/11 6/25 7/9 7/23 8/13

Release For: Jan Jan Feb Feb Mar Mar Apr Apr May May Jun Jun Jul Jul Aug

Released On: 8/27 9/10 9/24 10/8 10/22 11/5 11/17 12/3 12/17

Release For: Aug Sep Sep Oct Oct Nov Nov Dec Dec