Consumer Sentiment

RECENT NEWS
MarketWatch  Jul 14  Comment 
Americans feel plenty confident in the U.S. economy right now, but they are less optimistic the good times will roll on amid disappointment with Washington, according to a closely watched consumer-sentiment index.
SeekingAlpha  Jul 14  Comment 
Forex News  Jul 12  Comment 
The Australian dollar rallied today as the consumer sentiment improved, though it still was not particularly great. The Westpac-Melbourne Institute Index of Consumer Sentiment rose 0.4% in July from in June. It was the first increase after...
MarketWatch  Jul 5  Comment 
Lower gas prices and improved consumer sentiment appear to be encouraging more lavish spending.
Channel News Asia  Jun 27  Comment 
WASHINGTON: US consumer confidence rose slightly this month, returning to near-record highs after a modest dip in May, according to a monthly survey released on Tuesday (Jun 27). Consumer sentiment about current conditions improved but hopes for...
WA Business News  Jun 19  Comment 
The Australian share market has opened flat following a mixed close at Wall Street overnight where shares were hit after disappointing US consumer sentiment and housing data.
WA Business News  Jun 18  Comment 
The Australian dollar is higher against its US counterpart which has fallen broadly following weaker-than-forecast US housing and consumer sentiment data.
Wall Street Journal  Jun 16  Comment 
A closely watched gauge of U.S. consumer sentiment dropped in early June, a sign that political tensions in Washington may be denting Americans’ confidence in the economy.
SeekingAlpha  Jun 16  Comment 
Forbes  Jun 2  Comment 
Demand growth in the once-booming rooftop solar market in the United States appears to be leveling off, despite a reasonably healthy real estate market and strong consumer sentiment. During 2016, year-over-year installation growth slowed down to...




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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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