Consumer Sentiment

RECENT NEWS
Yahoo  May 27  Comment 
WASHINGTON (AP) — Americans turned more optimistic about the economy in May than the previous month, buoyed by steady hiring and higher incomes.
BBC News  May 27  Comment 
US markets ended higher on Friday after the government revised its figures for economic growth higher and consumer sentiment rose.
Wall Street Journal  May 27  Comment 
Americans are more confident than at any time in almost a year—with the consumer sentiment index rising to 94.7 this month from April’s 89.0—as cheap gasoline, low interest rates, and a rebound in stocks boost the economy’s prospects.
MarketWatch  May 27  Comment 
Election uncertainty helps send consumer sentiment lower in May
SeekingAlpha  May 27  Comment 
newratings.com  May 25  Comment 
BERLIN (dpa-AFX) - German consumer confidence is set to strengthen in June as the economy is expected to grow over coming months, survey data published by the research group GfK showed Wednesday. The forward-looking consumer sentiment index rose...
Mondo Visione  May 24  Comment 
Chinese consumer sentiment declined in May, eroding further the significant gain seen in March, as consumers turned more risk averse.    The Westpac MNI China Consumer Sentiment Indicator fell 3.1% on the month to 114.2 in May from 117.8 in...
Forbes  May 17  Comment 
This earnings season has seen some disappointments in the retail sector. Investors will get more guidance, and another read on consumer sentiment, from the sector as a handful of big-box stores ready to report this week. Target, in the midst of a...
Yahoo  May 13  Comment 
U.S. retail sales in April recorded their biggest increase in a year as Americans stepped up purchases of automobiles and a range of other goods, suggesting the economy was regaining momentum after growth almost stalled in the first quarter. The...
New York Times  May 13  Comment 
U.S. retail sales in April recorded their biggest increase in a year as Americans stepped up purchases of automobiles and a range of other goods, suggesting the economy was regaining momentum after growth almost stalled in the first quarter.




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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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