Econoday Report: Consumer Sentiment 28, 2005

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Consumer Sentiment

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. Why Investors Care

Released on 10/28/05 For Oct 2005

Sentiment Index, Level
Actual	74.2
Consensus	76.0
Consensus Range	75.0 to 78.0

Highlights
The University of Michigan's consumer sentiment index slipped further, down to 74.2 in October from 75.4 at mid month and from 76.9 in September.

Both this and the Conference Board's survey, released on Tuesday, are showing further erosion in confidence after the big hit of September. Still high gas prices and an uncertain jobs market, perhaps along with negative political news, are weighing on the consumer.

Low spirits combined with a negative savings rate may be pointing to trouble this holiday shopping season. Financial markets showed no immediate reaction.

Market Consensus Before Announcement
At mid-month, the University of Michigan's consumer sentiment index dropped modestly to 75.4. With inflationary pressures, it remains to be seen whether consumer attitudes will improve quickly.

Consumer sentiment Consensus Forecast for Oct 05: 76
Range: 75 to 78

Trends

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.)

Data Source: Haver Analytics

2005 Release Schedule

Released On: 2/4 3/4 4/1 4/29 5/27 7/1 7/29 8/26 9/30 10/28 11/23 12/23

Released For: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec