Sunday, June 19, 2011

USA Consumer Sentiment Drops in June (Charts) "Renewed concerns about outlook for the economy"


Thomson Reuters/University of Michigan: USA Consumer Sentiment

(Reuters New York, Friday, June 17, 2011)  U.S. consumer sentiment worsened more than expected in June on renewed concerns about the outlook for the economy, while worries about inflation eased modestly,  a survey released on Friday showed. Consumers remained pessimistic about stagnant incomes and job prospects, and their view of their own finances was largely unchanged at negative levels, the Thomson Reuters/University of Michigan survey showed. The preliminary reading on the overall index on consumer sentiment was 71.8, down from 74.3 the month before. It was below the median forecast of 74.0 among economists polled by Reuters.

Trend The short-term trend has reversed to downwards. The intermediate-term trend (6 months) continues downwards and the long-term trend (12 months) continues downwards.

Cycle History Consumer Sentiment reached a Post-Great Recession peak of 77.5 in February 2011, just before oil prices spiked up. A Great Recession cyclical and all-time low of 55.3 was set in November 2008. A Pre-Great Recession peak of 96.9 was reached in January 2007. In 2004 the index was greater than 100.

Consumer Sentiment Index (Chart) Below is a chart of the Reuters/University of Michigan Index of Consumer Sentiment from November 2008 through the latest month reported. November 2008 was the Great Recession and all-time low 55.3.

Consumer Sentiment 6-Month Moving Average (Chart) Below is a chart of the Reuters/University of Michigan Index of Consumer Sentiment 6-Month Moving Average from May 2007 through the latest month reported. The previous chart above, the Index of Consumer Sentiment, is rather like following the bouncing ball when charting human sentiment, confidence, mood, and outlook regarding the USA economy and their own individual prospects. Therefore, the 6-month moving average chart smooths out these short-term ups and downs and provides an intermediate-term perspective. The Pre-Great Recession peak was in May 2007 at 90.6 while the Great Recession low was in March 2009 at 58.0. The Post-Great Recession peak has been in June 2010 at 73.9. The 6-month moving average leveled off recently and is now slightly decreasing.

Commentary The Reuters/University of Michigan Index of Consumer Sentiment at 71.8 (preliminary) in June reverses the April and May increases, after the plunge in March due to higher gas prices and general world turmoil. USA consumer sentiment continues at historically low levels. The Reuters/University of Michigan Index of Consumer Sentiment will be revised later in the month from this preliminary reading.

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