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2008 Economic Calendar |
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Resource Center » U.S. & Intl Recaps | Release Dates | Why Investors Care | Today's Calendar
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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 11/9/07 For Nov 2007 | ||||||||||||
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Highlights
Plunging consumer confidence and soaring inflation expectations are a combination that is certain to make for headaches at the Federal Reserve. The Reuters/University of Michigan's consumer sentiment index fell to 75.0 in the preliminary November report, down from 80.9 in October for the worst reading since Hurricane Katrina in 2005. Even worse news is a 3 tenth jump in 1-year inflation expectations to 3.4 percent, the result of rising gas prices.
Non-inflationary economic growth is an ideal, and an unattainable one based on this report which points to stumbling growth with rising inflation. The psychology of inflation, specifically inflation becoming a factor in budget decisions, is arguably the greatest concern for Federal Reserve officials.
The Reuters/University of Michigan's consumer sentiment index fell to 80.9 in October from 83.4 in September. The index fell its sharpest since the aftermath of Hurricane Katrina two years ago. But consumer confidence indexes can be volatile, often showing major drops and major gains in sudden bursts. Current losses are concentrated in the most important sub-component, the assessment of future conditions which fell to 70.1. The assessment of current conditions is steady at a much firmer 97.6. Inflation expectations do show some pressure, no doubt tied to oil prices. Twelve-month inflation expectations are at 3.1 percent, up 1 tenth from mid-month but unchanged from September.
Consumer sentiment index Consensus Forecast for preliminary November 07: 80.0
Range: 77.6 to 81.5
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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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