Consumer Sentiment

RECENT NEWS
The Australian  Mar 18  Comment 
A FORECAST of the likely pace of economic growth is above trend for the first time in over a year, as the latest rate cut lifts consumer sentiment.
Wall Street Journal  Mar 13  Comment 
Consumers in early March scaled back their enthusiasm about the U.S. economy, according to the University of Michigan consumer sentiment index. The drop was concentrated in lower-income households facing higher utility bills.
Clusterstock  Mar 13  Comment 
Mondo Visione  Mar 11  Comment 
Russian consumers were slightly less pessimistic in February, although record high inflation expectations and a bleaker outlook for long-term business conditions are likely to weigh on sentiment in the future.   The MNI Russia Consumer...
Reuters  Mar 10  Comment 
Faster growth and improved consumer sentiment should boost sales of passenger cars and utility vehicles in India by 6 to 8 percent in the year starting in April, the country's auto industry body said on Tuesday.
Mondo Visione  Mar 10  Comment 
Consumer sentiment improved for the second consecutive month in February, providing a further sign that the extended downturn in confidence has come to an end. The MNI India Consumer Sentiment Indicator rose to 121.2 in February from 120.4 in...
The Economic Times  Feb 27  Comment 
US stocks held near the unchanged mark shortly after the open, following data on economic growth and ahead of a report on consumer sentiment.
Yahoo  Feb 27  Comment 
U.S. consumer sentiment fell from an 11-year high in February, weighed down by an unusually severe winter, a survey released on Friday showed. The University of Michigan's final February reading on the overall index on consumer sentiment was 95.4,...
Clusterstock  Feb 27  Comment 
By Chuck Mikolajczak NEW YORK (Reuters) - U.S. stock index futures were little changed on Friday, with major indexes on track for a fourth week of gains, ahead of readings on economic growth and consumer sentiment. * At 8:30 a.m., the...
Yahoo  Feb 24  Comment 
U.S. home prices rose again in December and activity in the services sector expanded in February at its fastest pace since October, but a gauge of consumer confidence fell, according to reports published on Tuesday. Federal Reserve chairman Janet...
Reuters  Feb 13  Comment 
U.S. stocks edged higher at the open on Friday, with the S&P 500 within striking distance of its intraday record, buoyed by upbeat German growth data and ahead of a reading on U.S. consumer sentiment.




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Consumer sentiment is the measurement of consumers' attitudes towards their financial positions and the present situation as well as expectations of the economic conditions.[1] Similar to consumer confidence, consumer sentiment is directly related to consumer spending. Since consumer spending accounts for almost two-third of U.S GDP, the level of consumer sentiment then becomes a key indicator to gauge the health of the economy.

Consumer Sentiment ‎
Consumer Sentiment [2]

Measures of consumer sentiment

Michigan Consumer Sentiment Index (MCSI)

Consumer sentiment is measured using the Michigan Consumer Sentiment Index (MSCI). The report is released twice a month from data collected from telephone surveys conducted with 500 U.S consumers. The survey is carried out by the University of Michigan and queries in the survey include consumers' financial situation and attitudes about the economy. Approximately 60% of total survey results are released in the preliminary report on the 10th of each month whereas the final report for the prior month is released on the first of the month.[3]

Why is it important?

The pattern in consumer attitudes has the foremost influence on both the stock and bond markets. Consumer sentiment figure impacts the stock market positively when sentiment is up, and negatively when sentiment is down. The industry that is most affected by consumer sentiment is the retail industry, as their profits are directly affected by consumer spending. In 2007, the credit crunch and spiking gasoline prices drove down consumer sentiment to record lows. However, as the index began to increase again in 2008, it helped investors to confirm that the economy is easing out of recession.[4]

See also: Consumer Confidence

References

  1. ForexForum: Forex Glossary
  2. Iacono Research
  3. Investopedia: Michigan Consumer Sentiment Index
  4. Econoday: 2010 Economic Calendar


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