Economics news, commentary, research: February 2015

Monday, February 16, 2015

Consumer sentiment

http://mam.econoday.com/byshoweventfull.asp?fid=467185&cust=mam&year=2015&lid=0&prev=/byweek.asp#top

2015 Economic Calendar

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Consumer Sentiment

Released On 2/13/2015 10:00:00 AM For Feb(p), 2015

	Prior	Consensus	Consensus Range	Actual
Sentiment Index - Level	98.1	98.5	96.5 to 100.2	93.6

Highlights
Consumer sentiment remains very strong but it did move down after spiking in January, to 93.6 for the mid-month February reading vs January's 98.1 which was the best reading in 11 years. The 93.6 reading is still very solid, matching December's reading as the second best of the last 8 years.

The fall back for the index is divided about equally between the two components, current conditions at 103.1 vs 109.3 and expectations at 87.5 vs 91.0. The dip for current conditions points to possible slowing in consumer activity this month, while the dip in expectations points to a little less optimism in the outlooks for jobs and income.

Gas prices are low but haven't been falling any further this month. One-year inflation expectations are up a sizable 3 tenths to 2.8 percent which however is still low for this reading. In an offset, 5-year expectations are down 1 tenth to 2.7 percent.

The prior spike for consumer sentiment offered a leading indication on gains in the jobs market but not on consumer spending which is still flat. And today's report doesn't point to any improvement. These results will lower expectations for the consumer confidence index at month's end, a separate report that also posted an outsized spike in January. The Dow is moving off opening highs.

Recent History Of This Indicator
The University of Michigan's consumer sentiment index held on to its very strong surge at the beginning of the month, ending January at 98.1 versus the mid-month reading of 98.2 and compared against 93.6 in December. The current conditions component extended its first half gain to 109.3 versus 108.3 at mid-month and against 104.8 in December. The comparison with December points to strength for January consumer activity. The expectations component ended January at 91.0 versus 91.6 at mid-month and 86.4 in December.

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.)

2015 Release Schedule

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