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Consumer Sentiment  
Released On 8/17/2012 9:55:00 AM For Aug(p), 2012
PriorConsensusConsensus RangeActual
Sentiment Index - Level72.3 72.0 71.0  to 75.5 73.6 

The consumer's assessment of current conditions, underscoring perhaps the improvement seen in weekly jobless claims, is up solidly so far this month at 87.6 vs July's 82.7. But this gain isn't translating into any more optimism on the outlook as the expectations index fell more than 1 point to 64.5 vs 65.6 in July. Together, these components make for a 1.3 point gain in the composite headline index where the mid-month reading is 73.6 which is tangibly better than the Econoday consensus for 72.0.

Food price inflation is a big news story right now even though it has yet to hit the supermarkets based on Wednesday's CPI report. But consumers are already pricing it in based on 1-year inflation expectations which are up a very big 6 tenths to 3.6 percent. Another factor at play also may be the rise in oil back to over $90 though gains at the pump are so far limited. Expectations for the 5-year outlook are also higher, up 3 tenths to 3.0 percent.

The Dow moved to opening highs in immediate reaction to this report which offers an early hint of improving conditions, at least for the month of August compared to the month of July. But the inflation readings and the downbeat expectations are a reminder that risks to the outlook remain.

Consensus Outlook
The Reuter's/University of Michigan's consumer sentiment index was essentially flat in July, which finished the month at 72.3 for a marginal 3 tenth gain from mid-month and a 9 tenths decline from June. The best news was in the assessment of current conditions where the index was at 82.7 which, though down 5 tenths from mid-month, was up 1.2 points from June. The outlook, however, is deteriorating but only slightly with the expectations index at 65.6 which was up 8 tenths from mid-month but down 2.2 points from June.

The University of Michigan's Consumer Survey Center questions 600 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.)

2012 Release Schedule
Released On: 1/131/272/102/243/163/304/134/275/115/256/156/297/137/278/17
Release For: JanJanFebFebMa(p)rMarAprAprMayMayJunJunJulJulAug
Released On: 8/319/149/2810/1210/2611/911/2112/712/21
Release For: AugSepSepOctOctNovNovDecDec

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