Consumer Sentiment

RECENT NEWS
The Times of India  May 18  Comment 
One year is a small yardstick by which one can measure the performance of a new government. But as the Modi government braces the one year milestone, its report card from the consumption and consumer sentiment point of view reveals a mixed picture.
The Economic Times  May 15  Comment 
The dollar index slipped on Friday, putting it on track to fall for a fifth week, the longest stretch of declines in four years, as disappointing data on domestic factory activity and consumer sentiment stirred doubts about the US economic growth.
TheStreet.com  May 15  Comment 
NEW YORK (TheStreet) -- Stocks were hovering just under the flatline after consumer sentiment hit a seven-month low in May and weak industrial data in April suggested a bounceback from the dismal first quarter could be more gradual than hoped...
Wall Street Journal  May 15  Comment 
Consumers turned more skeptical about the economy in early May, according to data released Friday. The turn suggests there will be no quick pickup in consumer spending.
Clusterstock  May 15  Comment 
NEW YORK (Reuters) - U.S. consumer sentiment fell more than expected in May, a survey released on Friday showed. The University of Michigan's preliminary May reading on the overall index on consumer sentiment was 88.6, down from the final April...
newratings.com  May 14  Comment 
WASHINGTON (dpa-AFX) - Reflecting decreases in the assessment of current conditions and the economic outlook, the University of Michigan released a report on Friday showing a substantial decrease in U.S. consumer sentiment in the month of...
Mondo Visione  May 8  Comment 
The MNI Russia Consumer Sentiment Indicator rose by 5.5% on the month to 73.0 in April, almost offsetting March’s drop to a series low of 69.2.   Four of the five components that make up the MNI Russia Consumer Sentiment Indicator improved...
The Times of India  May 6  Comment 
Consumer sentiment improved in April on better job prospects, increased expectations about household income and drop in inflation levels, according to a latest survey. ZyFin Research’s COI (Consumer Outlook Index) improved to 45.7 in April, up...
Mondo Visione  May 6  Comment 
The MNI India Consumer Sentiment Indicator rose by 3% to 122.1 in April from 118.5 in March with respondents more optimistic about their current circumstances, underpinned by the recent easing in the key interest rate by the Reserve Bank of India...




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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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