Consumer Sentiment

RECENT NEWS
The Australian  Jan 20  Comment 
CONSUMER sentiment has remained weak despite a bounce this month and further cuts in interest rates may still be needed to guard against a downturn.
TechCrunch  Jan 19  Comment 
 Tastebud, a company that builds mobile loyalty applications for retailers, has acquired SocialCrunch. Both firms hail from Chicago. SocialCrunch was a graduate of TechStars in 2013, raising $785,000 in its lifetime. The deal was an all-stock...
The Economic Times  Jan 19  Comment 
Major concern is that pickup in consumer sentiment is not getting translated into higher consumption, leading to uncertainty in growth prospects of FMCG cos.
Reuters  Jan 17  Comment 
Wall Street stocks rebounded on Friday on signs the U.S. economy was on track for solid growth with consumer sentiment hitting an 11-year high, while the euro slid further against the dollar a day after Switzerland ditched its currency cap.
MarketWatch  Jan 16  Comment 
The preliminary January reading of the University of Michigan/Thomson Reuters consumer-sentiment index jumped up to 98.2 -- the highest level since 2004 -- from a final December reading of 93.6, according to reports on data released Friday....
TheStreet.com  Jan 16  Comment 
NEW YORK (TheStreet) -- Stocks were moving higher on Friday as oil prices rebounded and consumer sentiment jumped. Stocks rose despite the reverberations still being felt by Switzerland's surprise decision a day earlier to abandon its currency...
Wall Street Journal  Jan 7  Comment 
Despite stagnating prices and flagging consumer sentiment, many European executives are taking comfort in what is proving to be—for the time being—a more powerful economic current: a sharply falling euro.
The Times of India  Jan 6  Comment 
The current score has been elevated by improving consumer sentiment toward big-ticket purchases, coupled with a more favourable view on inflation.
Mondo Visione  Dec 23  Comment 
Consumer confidence reached its most favorable level in the December 2014 survey since the last cyclical peak was set in January 2007. The gains over the past several months have been primarily due to improving job and wage prospects, and more...




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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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