Econoday Report: Consumer Sentiment July 10, 2009

2009 Economic Calendar

Resource Center » U.S. & Intl Recaps | Release Dates | Event Definitions | Today's Calendar

Consumer Sentiment

Released on 7/10/2009 9:55:00 AM For July, 2009

	Prior	Consensus	Consensus Range	Actual
Sentiment Index - Level	70.8	71.5	68.0 to 72.0	64.6

Highlights
Consumer confidence crumbled in June and it is continuing to crumble so far in July. Reuters/University of Michigan consumer sentiment index fell more than 6 points to 64.6 for mid-month July. Weakness is now centered where there used to be increasing strength, in expectations which fell more than 8 points to 60.9. Expectations is the leading component in consumer confidence reports. Current conditions, the second component, fell nearly 3 points to 70.4.

Inflation expectations were mixed with the one-year reading dipping back 1 tenth to 3.0 percent and in line with this month's decrease in pump prices. Five-year expectations rose 1 tenth to 3.1 percent.

Stocks fell back as did commodities in immediate reaction to today's report which points to continued reversal in consumer spirits, spirits that had shown significant improvement in prior months. Note that most signals for next week's retail sales report are pointing to weakness, in what would be weakness in three of the last four months. This report is pointing now to the risk of a fourth month of disappointment.

Market Consensus Before Announcement
The Reuter's/University of Michigan's Consumer sentiment index rose a modest 1.9 points in May to 70.8 in June. While the gain is good news, the degree of improvement slowed from recent months. The index had jumped nearly 4 points in May and nearly 8 points in April. Markets will be giving the consumer sentiment report more attention than usual this report because the June consumer confidence index from The Conference Board actually fell back. Any news that the consumer is less worried about the economy will be welcomed by the markets-especially after the latest Conference Board report.

Definition
The University of Michigan's Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending. Consumer confidence and consumer sentiment are two ways of talking about consumer attitudes. Among economic reports, consumer sentiment refers to the Michigan survey while consumer confidence refers to The Conference Board's survey. Why Investors Care

Consumer sentiment is mainly affected by inflation and employment conditions. However, consumers are also impacted by current events such as bear & bull markets, geopolitical events such as war and terrorist attacks. Investors monitor consumer sentiment because it tends to have an impact on consumer spending over the long run (although not necessarily on a monthly basis.)

2009 Release Schedule

Released On: 1/16 1/30 2/13 2/27 3/13 3/27 4/17 5/1 5/15 5/29 6/12 6/26 7/10 7/24 8/14

Released For: Jan Jan Feb Feb Mar Mar Apr Apr May May Jun Jun Jul Jul Aug

Released On: 8/28 9/11 9/25 10/16 10/30 11/13 11/25 12/11 12/23

Released For: Aug Sep Sep Oct Oct Nov Nov Dec Dec

Order the 2010 Econoday Investor's Journal Print Edition