Econoday Economic Report: Consumer Sentiment February 27, 2009

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Consumer Sentiment

Released On 2/27/2009 9:55:00 AM For February, 2009

	Prior	Consensus	Consensus Range	Actual
Sentiment Index - Level	56.2	56.0	52.0 to 57.0	56.3

Highlights
Consumer spirits are at rock bottom, a reflection of the jobs market of course and perhaps the repeated warnings from policy makers that compare current economic conditions to those of the Great Depression. The Reuters/University of Michigan consumer sentiment index for February came in at 56.3, little changed from 56.2 at mid-month and compared against 61.2 in January. The expectations component is acutely weak, at 50.5 indicating that consumers don't yet see a bottom for the economy. The current conditions component slipped slightly to 65.5. Weak economic conditions are reflected in near-term inflation expectations which are at 1.9 percent one-year out. But five years out consumers see a return to normal trends with inflation at 3.1 percent in what is the only good news in today's report. There was no significant reaction in the financial markets.

Market Consensus before announcement
The Reuter's/University of Michigan's Consumer sentiment index continued to show the consumer sector in a glum mood. The Reuters/University of Michigan consumer sentiment index dropped 5 points at mid-February to 56.2 from January's 61.2. February's figure was barely above the record low of 51.7 set May 1980. Continued boosts in jobless claims, additional stock market losses, and now a bump up in gasoline prices are likely to keep sentiment close to record lows for some time.

Consumer sentiment Consensus Forecast for final February 09: 56.0
Range: 52.0 to 57.0

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. Preliminary estimates for a month are released at mid-month. Final estimates for a month are released near the end of the month. 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

Release 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

Release For: Aug Sep Sep Oct Oct Nov Nov Dec Dec