Econoday Economic Report: Consumer Sentiment December 23, 2009

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Consumer Sentiment

Released On 12/23/2009 9:55:00 AM For December, 2009

	Prior	Consensus	Consensus Range	Actual
Sentiment Index - Level	73.4	73.5	72.0 to 74.0	72.5

Highlights
Consumer sentiment shows little change at the month-end reading, at 72.5 vs. 73.4 earlier in the month but still sizably up from November's final reading of 67.4. The assessment of current conditions, at 78.0, remains less pessimistic than the assessment of future conditions, at 68.9. Expectations typically lead current conditions which in this case is a negative pointing to continued weak results in future reports. One-year inflation expectations rose 4 tenths from mid-month to a still benign 2.5 percent and down from 2.7 percent in November. Today's report unfortunately shows no surge of optimism heading into the final days of the holiday shopping season. The Conference Board's monthly consumer confidence report will be released on Tuesday.

Market Consensus before announcement
The Reuter's/University of Michigan's Consumer sentiment index for mid-month December jumped to 73.4 from 67.4 for the November final estimate. The latest gain was led by a spurt in the current economic conditions index-to 79.1 from 68.8 in November. The expectations index improved, but only slightly-to 69.7 from 66.5 the prior month. Inflation expectations for one year out dipped 6 tenths to 2.1 percent and for five years out declined 4 tenths to 2.6 percent.

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