Friday, December 10, 2010

USA Consumer Sentiment at 6-Month High (Chart) *2 consecutive strong monthly increases*

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Thomson Reuters/University of Michigan: USA Consumer Sentiment


USA Consumer Sentiment at 6-Month High

Official Statement (Reuters, December 10) - U.S. consumer sentiment rose more than expected in early December while an index of current conditions jumped to its highest level since January 2008, a survey released on Friday showed. The Thomson Reuters/University of Michigan's preliminary December reading on the overall index on consumer sentiment came in at 74.2, up from 71.6 in November. That was the best level for sentiment since June and the third-highest level since the start of 2008, according to the survey. It was also above the median forecast of 72.5 among economists polled by Reuters.

Cycle History Consumer Sentiment in December (preliminary) is down -22.7 and -23.4% from the intermediate-term peak of 96.9 in January 2007. In 2004 the index was greater than 100. The current sentiment is up +18.9 and +34.2% from the cyclical bottom of 55.3 in November 2008 (the all-time low). Therefore, the current sentiment is closer to the cyclical trough than peak, but has rebounded to near mid-range.

Trend Consumer Sentiment plunged in July 2010 to 67.8 from 76.0 in June (-8.2). Previously, sentiment had been above 70.0 since December 2009 - seven consecutive months. This plunge negated the +7.8 increase in September 2009. Current sentiment (preliminary) now is above the 12-month moving average (71.8) after 5 consecutive months below. The 12-month moving average has leveled off. The current sentiment is above the 24-month, and 36-month moving averages of 69.0 and  67.3, respectively. The 24-months moving average is ascending and the 36-month moving average has leveled off after descending. (The 12-month, 24-month, and 36-month moving averages charts are not shown on this page).

Consumer Sentiment (Chart) Below is a chart of the latest 36 months of the Reuters/University of Michigan Index of Consumer Sentiment from January 2008 through the latest month reported, December 2010 (preliminary). Not shown on the chart is the last sentiment peak in January 2007 at 96.9, a decline ensued, and the bottom was in November 2008 at 55.3 (which also was an all-time low). The latest sub-peak was in June 2010 at 76.0. A change in trend to the downside then occurred which has been reversed the past 2 months. (This preliminary data will be updated to the revised data on the chart later this month, without a subsequent post.



Commentary The Reuters/University of Michigan Index of Consumer Sentiment at 74.2 (preliminary) for December is encouraging and is approaching the recent June 2010 peak of 76.0. Both are well below the January 2007 intermediate-term peak of 96.9. Gallup is reporting somewhat more negative economic confidence on December 6, "U.S. Economic Confidence Down Last Week, Lowest since early October". The Conference Board will report their monthly Consumer Confidence Survey at the end of this month.


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