Consumer Sentiment

RECENT NEWS
Yahoo  Mar 28  Comment 
The Thomson Reuters/University of Michigan's final March reading on the overall index on consumer sentiment came in at 80.0, up a tick from the preliminary 79.9 March reading but down from an 81.6 the month before. "Current conditions in the...
Bloomberg  Mar 27  Comment 
Consumer Sentiment in the U.S. Declines to a Seven-Week Low Consumer confidence in the U.S. declined to the lowest level in seven weeks as Americans turned more pessimistic...
newratings.com  Mar 26  Comment 
WASHINGTON (dpa-AFX) - Early indications suggest that Wall Street stocks may open higher on Wednesday, as the markets fight hard to retain the momentum built up in the previous session. Earlier in the global trading day, Asian stocks managed to...
newratings.com  Mar 26  Comment 
BERLIN (dpa-AFX) - German consumer confidence is expected to remain stable at a 7-year high in April, but the developments in Crimea could weigh on the consumer mood in coming weeks, results of a closely watched survey from the market research...
newratings.com  Mar 21  Comment 
LJUBLJANA (dpa-AFX) - Slovenia's consumer confidence improved modestly in March, but remained well below the long-term norms, data published by the Statistical Office of the Republic of Slovenia revealed Friday. The unadjusted consumer...
Forbes  Mar 20  Comment 
Over the past few quarters, the company hasn’t done well in any of its main markets and this trend is likely to continue in the fourth quarter as well. In the U.S., a huge decline in foot traffic, weak consumer sentiment and fierce competition...
Forbes  Mar 20  Comment 
The retailer’s special collections were expected to do well, but extreme weather and weak consumer sentiment overshadowed its fashion changes. Following these results, the company issued lackluster guidance, suggesting that its recovery is...
Yahoo  Mar 14  Comment 
U.S. consumer sentiment weakened in early March as an unusually harsh winter appeared to dim views on the economy's prospects. The preliminary Thomson Reuters/University of Michigan index of consumer sentiment fell to 79.9 in March from 81.6 the...




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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.

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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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