Econoday Economic Report: Consumer Sentiment August 14, 2009

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Consumer Sentiment

Released On 8/14/2009 9:55:00 AM For August, 2009

	Prior	Consensus	Consensus Range	Actual
Sentiment Index - Level	66.0	68.5	67.2 to 70.0	63.2

Highlights
Mixed is the description of the current run of economic data, some good and some bad. Today's Reuters/University of Michigan survey falls under bad. The index fell back nearly 3 points at mid-month to 63.2. Despite improvement in jobs and improvement in manufacturing and improvement in housing, weakness is centered in the current conditions component (64.9 vs. 70.5). Expectations, the leading component, also sank (62.1 vs. 63.2). More and more, the consumer sector looks to be a heavy drag on the recovery -- just look back at yesterday's retail sales report. Stocks and commodities weakened in immediate reaction to today's data.

Market Consensus before announcement
The Reuter's/University of Michigan's Consumer sentiment index edged 1.4 points higher to 66.0 for the final July reading, compared to 64.6 at mid-month but still down from 70.8 for final June. Still, the latest is quite an improvement from the 56.2 reading in mid-February which marked the year's low.

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